Four Offshore Wind Projects; Four Different Tracks

The Rhiode Island and Masschusetts Wind Energy Area. (BOEM)

The Rhiode Island and Masschusetts Wind Energy Area. (BOEM)

By JOYCE ROWLEY/ecoRI News contributor

Even as NSTAR jacked up its prices by 29 percent in January largely because of increasing natural gas-supply costs, renewable wind energy from the 700-megawatt Cape Wind project has again been put on hold.

NSTAR and National Grid recently terminated their power-purchase agreements with Cape Wind Associates for 77.5 percent of the anticipated electricity from the Nantucket Sound wind farm. Then came notice on Jan. 20 that ISO-New England shut Cape Wind out of the wholesale market, too. The nonprofit grid operator ensures the safe and continuous supply of electricity throughout New England.

Cape Wind spokesman Mark Rodgers said the company will seek permission from ISO-NE for re-entry into that market in advance of energy production. The company has contested the termination of the power-purchase agreements, invoking a clause in those agreements that allows an extension under extenuating circumstances.

But the domino effect on Cape Wind’s ability to sell its power sent a small ripple to the Massachusetts Clean Energy Center’s Marine Commerce Terminal in New Bedford, where the company holds a two-year lease agreement.

“With the terminal 98 percent complete, MassCEC is now focused on the task of the transition from construction to operations,” spokeswoman Catherine Williams said. “Conceived as a multipurpose operation, the terminal is equipped to handle the needs of both marine cargo and offshore wind tenants.”

She said MassCEC is seeking proposals from qualified operators to manage the terminal and to begin using the site for other types of marine cargo. A request for proposal for terminal operators calls for application submission by March 30.

“The selected operator will work with Cape Wind to stage the project out of the terminal if Cape Wind reaches financial close in the future,” Williams said.

Bargain bids
A second major offshore wind energy project is still going forward but on a smaller scale. The Bureau of Ocean Energy Management (BOEM) recently announced provisional winners of two leases totaling 354,409 acres in the Massachusetts Wind Energy Area. A total of 742,000 acres were offered in four leases. Two leases further offshore from likely service ports didn’t receive bids.

Of the 12 wind-energy companies eligible, only two participated in the competitive online auction. Provisional winners have one year to prepare site assessment plans and five years to complete construction and operating plans before they can build.

The wind-energy companies that did bid, however, got a bargain. Unlike the 80,000-acre Maryland Wind Energy Area that went for $8.7 million — an average $108.75 per acre — the sales price for the two Massachusetts tracts was $1.50 and $1 per acre.

RES Americas Development LLC, a holding company for the RES Group, took one of the tracts in a short one-hour auction. RES Group companies produce more than 6,000 megawatts through 58 land-based U.S. wind farms. The global renewable-energy leader has built wind farms in seven countries, including 18 offshore wind farms in the United Kingdom.

OffshoreMW LLC, backed by an investor in the Blackstone Group, took the second tract in an uncontested bid. Its sister company, WindMW, is in on the construction of the Bremerhaven, an offshore wind farm in Germany. Vice president Erich Stephens also said the firm is involved in developing offshore wind in New Jersey, but the state has yet to complete energy legislation.

That, apparently, is the key to the difference in pricing: Maryland passed state legislation in 2013 that ensures wind energy gets reasonable power-purchase agreements, making the likelihood of getting a buyer for the power less risky.

Massachusetts House Speaker Pro Tempore Patricia Haddad, D-Somerset, proposed similar energy legislation on Jan. 16. The bill calls for strengthening energy diversity in the face of uncertain long-term costs of traditional energy sources. Under this new legislation, distribution systems would be required to enter into long-term “commercially reasonable” agreements with offshore wind energy plants by June 2016.

Sites such as the Salem Harbor Power Station and the Brayton Point Power Station also would get preference for re-use of new electrical generation sources, receiving Regional Greenhouse Gas Initiative emission credits for five years if they can demonstrate the new source reduces greenhouse-gas emissions.

Coal-fired Brayton Point is scheduled to close in 2017, largely because of its inability to compete with natural gas.

New leader
Cape Wind’s latest setback could help a third offshore wind project, the Block Island Wind Farm, become the “first in the water.” Deepwater Wind LLC was the successful bidder on the state-sponsored six-turbine small-scale wind farm.

With all of the necessary permits in hand, Deepwater Wind LLC has contracted with Gulf Island Fabrication to begin fabrication and construction of the six turbines at Quonset Point in North Kingstown, R.I.

Deepwater Wind also is moving on its plans to develop the 150-turbine wind farm on two lease areas in the Rhode Island-Massachusetts Wind Energy Area known as Deepwater One. After winning the bid on the North and South leases in August 2013, Deepwater Wind must submit a site assessment plan for the North lease area by April 1. Information gathered from the North area will be used to prepare the construction and operation plan for the entire lease area.

Legal battles
Beleaguered by constant litigation for 13 years, Cape Wind made it through the labyrinthine process of local, state and federal permitting. It fought and won no fewer than 26 civil suits, most brought by the same persistent and wealthy group of Cape Codders.

According to the 2007 site map, the Cape Wind project was to be built within 14 miles of Nantucket, roughly 9 miles to Edgertown and Oak Bluffs and just over 6 miles to Craigsville Beach in Hyannis.

Lease tracts of the Massachusetts Wind Energy Area start about 12 nautical miles offshore of Nantucket. Deepwater Wind’s lease area in the 165,000-acre Rhode Island Wind Energy Area is 15 miles from Martha’s Vineyard and would hold 150 wind turbines. The Block Island Wind Farm is a scant 3 miles from Block Island.

The Alliance to Protect Nantucket Sound, a nonprofit with backing from William Koch, formerly with the family business Koch Industries and now the founder and president of the Oxbow Group, was responsible for most of the 26 lawsuits.

Koch is reported to have donated some $5 million to the fight to protect his Nantucket Sound waterfront views. Both Koch Industries and Oxbow produce petroleum coke from oil sands.

The Alliance to Protect Nantucket Sound recently stated it will now go after the last two holdings of Cape Wind — a lease on 46 square miles of Nantucket Sound and the MassCEC for use of the South Coast Marine Commerce Terminal.

The Koch-backed group, however, also has had its legal challenges. In 2010, an Alliance consultant, Mark Weissman of the Massachusetts Marine Fisheries Commission, was fined $2,500 for failing to report a conflict of interest. Weissman received $48,000 from the Alliance while advocating for the opposition of Cape Wind from within the commission.

Also in 2010, the Alliance had to pay a $22,500 fine to the Massachusetts Office of Campaign and Political Fund after that office found that the nonprofit had directly engaged in electioneering activities.

In 2013, Cape Cody Today reported that several environmental groups petitioned the IRS to investigate the Alliance's nonprofit status, claiming it hadn’t reported a $394,000 grant to the town of Barnstable to help battle Cape Wind in court.