Cape Cod wind farm tiptoes ahead 

BARNSTABLE, Mass.—Philip Scudder said his ferry company here was once a vocal opponent of the alternative-energy proposal that blew into Cape Cod nearly a decade ago. The U.S.’s first offshore wind farm? In the middle of pristine Nantucket Sound? He wondered how his boats carrying vacationers bound for Martha’s Vineyard would navigate around the turbines.

But now, Mr. Scudder, a 13th generation Cape Codder and part of the family that owns Hy-Line Cruises, supports Cape Wind, the proposal to place 130 wind turbines, with the highest blade tip reaching 440 feet above water, some five miles offshore. He says it would bring not only clean energy but economic opportunity: Hy-Line is now shopping for vessels to eventually give “eco-tours,” educational boat rides out to see the turbines up close.

Mr. Scudder illustrates the conflicting views on the long-debated project in an area known as the jewel of Massachusetts and a vacation land for the affluent. After a decade, Cape Wind developer Energy Management Inc. is beginning geological survey work in the sound, a precursor to its goal of starting construction next year.

But whether the wind farm is built remains to be seen. Cape Wind has yet to receive all the approvals it needs to start construction. Opposition is firm and has included wealthy Cape Cod homeowners from the late Sen. Edward Kennedy to Republican donor and energy businessman William Koch.

The Obama administration is pushing for more renewable-energy projects, both on and offshore. This week, the Interior Department said it was assessing a proposal by the North American arm of StatoilSTO +0.20% ASA, a Norwegian energy company, for a wind farm off the coast of Maine.

The Interior Department approved Cape Wind in 2010. The project calls for the off-white wind turbines in a 25-square-mile area in a shallow part of the sound, a triangular body of water surrounded by Cape Cod, Nantucket and Martha’s Vineyard. The closest vantage point would be nearly five miles away in Mashpee, next to Barnstable.

The turbines are “majestic and beautiful,” and on a clear day would appear “like a half-inch sailing mast on the horizon,” said Jim Gordon, the president of Energy Management, Cape Wind’s developer.

Opponents are skeptical.

“I’m just not buying it,” says Barnstable Town Manager Thomas Lynch, who worries about public-safety costs to the town if there were a problem at the wind farm.

The project is estimated to cost $2 billion. Energy Management said it has spent $50 million developing it and is working with Barclays PLC to secure private funding. The wind farm is expected to produce as much as 468 megawatts of renewable energy, which is about 3.5% of the 13,300-megawatts total generating capacity in Massachusetts.

Cape Wind has signed long-term contracts to sell 78% of its power to the state’s largest utilities.

The wind power’s cost is as much as twice that of conventional power, but because it would be a small portion of the overall energy pool, consumers would see at most a 2.2% increase to their monthly bills, according to estimates in a 2010 report by Massachusetts regulators.

Cape Wind has yet to clear one major regulatory hurdle: the Federal Aviation Administration is reviewing the project after opponents appealed its initial approval in 2010. The FAA must determine whether the wind farm would pose a risk to aircraft radar.

The project also faces headwinds from a decline in the price of natural gas, which undermining the case for renewable energy—though it isn’t clear how long the dip will last.

In addition, the federal government’s tax-credit program for wind projects is set to expire at year-end, and Congress has shown little gusto for alternative-energy subsidies in the wake of the fallout over government loans to failed solar-panel company Solyndra LLC.

“It’s more difficult, but our plan is to do everything we can to move forward in any way,” said Mark Rodgers, a spokesman for Energy Management.

Mr. Rodgers believes some opponents, like Mr. Koch, who has a waterfront home on Cape Cod and who is in the coal business, are worried about competition from wind energy. Mr. Koch is a funder of the Alliance to Protect Nantucket Sound, said his spokesman Brad Goldstein. The Alliance is the project’s main opponent.

Mr. Goldstein said Mr. Koch’s business interests have nothing to do with his opposition to the project. Mr. Koch believes the proposal isn’t feasible without government support and that it “spoils a beautiful sanctuary,” Mr. Goldstein said.

Thursday, at the harbor in Hyannis Port, a village that is part of Barnstable, Hy-Line’s Mr. Scudder watched eagerly from his dock as research crews unloaded ocean samples from a vessel that had returned from the sound as part of Cape Wind’s survey work. A decade of review on the project has eased any questions he had, he said.

Motioning out to Nantucket Sound, he said, “Some people are worried because there’s never been something out there, so it’s unknown. But the chance to have the first offshore wind farm in the U.S. on Cape Cod—I see it as an opportunity.”