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Some logic still prevails — Cape Wind loan guarantee on hold
Credit: By Rod Adams, atomicinsights.com 16 May 2011 ~~
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Translate: FROM English | TO English
The famous project to install 130 massive industrial wind turbines in the Nantucket Sound off of the coast of Massachusetts has hit another stumbling block. Financing for the project was dependent on approval of an application for a large Department of Energy loan guarantee, but the project has been notified that their application is no longer being considered at this time. The review process is not being terminated, but it has been put on the shelf in order to allow reviewers to focus on those projects that have a reasonable chance of reaching financial close by September 30, 2011.
One of the reasons that Cape Wind was not on the list of the projects that will continue to move forward is the not surprising fact that the project developers have not been successful in finding customers for the 50% of the projected output that remains to be sold. Back in May 2010, I wrote about the contract that National Grid signed to purchase 50% of the output for 20.7 cents per kilowatt hour with a guaranteed rate of escalation of 3.5% per year for 15 years. In June 2010, I pointed out that Wal-Mart had joined the ranks of the power customers who were not happy about that deal.
The project promoters have not found a taker for the remaining 50% despite working for a year to market their product. It looks like no one really wants to pay 4-6 times the going rate for power, especially when the high priced power depends on the whim of the weather.
As a former off-shore sailor who has spent a few pleasant afternoons on Nantucket Sound, I know there are many who are breathing a sigh of relief that their breezes will not be chopped up. I expect they are joined by the fishermen whose productive areas will not be disturbed by the construction project, annoying low frequency noises, and underwater infrastructure.
I suspect the happy participants are joined by the people who love to gaze out over the ocean to see a vast horizon. There is something awe inspiring about looking out over the ocean; there is a reason why ocean front homes are so darned expensive. Fortunately, there are public access areas that allow the rest of us to occasionally experience those restorative vistas.
If a corporation is going impose their project into a public space that is already providing valuable uses, I would hope that they would at least pay for the damage themselves and that the project would at least provide a valuable product at a reasonable cost. With the DOE decision to halt efforts to review the loan guarantee application, Cape Wind now has the chance to really puts its sales skills to work in finding more dupes who will sign up to buy really expensive, but unreliable power.
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