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Cape Wind struggles for survival
Credit: Christine Legere | Cape Cod Times | January 21, 2015 | www.capecodonline.com ~~
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When NStar and National Grid announced earlier this month the end of plans to buy power from the proposed Nantucket Sound wind farm, opponents of the project claimed victory even as proponents held out hope for its survival.
Since then, however, a spokesman for a Rhode Island port has confirmed Cape Wind stopped making payments on a lease option there and an agreement to buy property in Falmouth for the wind farm’s operations base appears to have fallen through, further diminishing prospects for the project’s future.
“The agreement was terminated last week,” Quonset Development Corporation spokesman Ted Kresse said about an option Cape Wind had to lease two properties in North Kingstown, R.I., Cape Wind was paying $4,800 per month to Quonset since signing a 12-month lease option in September.
Another arrangement to buy a marina on Falmouth Harbor that was announced in 2012, and included the promise of 50 new jobs, also appears to be dead in the water. A man who answered the phone at East Marine said Cape Wind’s agreement to buy the property for a base of operations is off.
“Cape Wind is not in the mix anymore,” said the man, who refused to give his name. “We have nothing to do with Cape Wind.” The purchase-and-sale agreement was terminated Dec. 31, he said.
Cape Wind spokesman Mark Rodgers declined to comment on the project’s future.
NStar and National Grid officials announced Jan. 6 the end of power purchase agreements with Cape Wind, saying the company had missed a Dec. 31 deadline to secure financing and meet other important milestones. Cape Wind could have paid $1.8 million to extend the agreements for an additional six months but instead claimed that litigation constituted a force majeure, which would allow the extension of the contracts without the payment.
The utilities disagreed and without buyers for its energy it’s nearly impossible for Cape Wind to secure the $2.6 billion required for construction, according to renewable energy financing experts.
Siemens Energy Inc., which was expected to provide the project’s turbines and had also indicated its willingness to chip in $100 million in financing if necessary, is watching the latest developments closely, according to company spokesman Jeff Grappone.
“Siemens remains committed to this project and the U.S. offshore wind market, and we hope a path can be found that allows the project to move forward,” Grappone wrote in an email.
A $4.5 million deal to lease South Terminal in New Bedford for the staging and construction of the 130 turbines is still on, according to Massachusetts Clean Energy Center spokeswoman Catherine Williams. The terminal is owned by the quasi-public agency center, which signed an agreement with Cape Wind last year for a two-year lease of the site.
“The lease contains a standard financing contingency and the lease term is two years with options for two one-year extensions,” Williams wrote in an email, adding that the time frame for the use of the terminal remains uncertain because Cape Wind has not completed financing the project.
Cape Wind has announced about $1.45 billion in tentative financing for the project from various sources so far, including a $150 million loan guarantee from the U.S. Department of Energy.
“While we can’t discuss the specific terms of our conditional commitments, the Department works with project developers to ensure any outstanding legal, financial, commercial and technological conditions are met before moving forward with any project,” DOE spokeswoman Dawn Selak wrote in an email.
Cape Wind’s primary opposition group, the Alliance to Protect Nantucket Sound, is taking advantage of recent developments, issuing a press release Wednesday saying it had launched a radio ad campaign to “sound the alarm” on the economic, environmental and public safety risks connected to the project first proposed in 2001.
Supporters, meanwhile, have planned two emergency meetings Saturday in Cambridge to “save Cape Wind.”
In a meeting Tuesday with the newly appointed Secretary of Energy and Environmental Affairs Matthew Beaton, former Department of Environmental Protection Commissioner Ken Kimmell, who is now president of the Union of Concerned Scientists, said the state should encourage wind energy development in Nantucket Sound, according to the State House News Service.
“I would make that a top priority to replace that lost energy,” Kimmell said, adding that Beaton should “put a plan in action to put those megawatts out to bid.”
“That was a very specific project for Cape Wind, so I don’t believe the land will be bid out,” Beaton told the News Service. “We’re going to have to take a step back and look at all the options on offshore wind going forward.”
UPDATE: This article has been updated to correct the location of Quonset Development Corporation. It is located in North Kingstown, R.I.
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