Cape Wind, a $2.5 billion initiative to build 130 wind turbines in the Nantucket Sound, located off of Cape Cod, Massachusetts, aims to be the first offshore wind energy project in U.S. coastal waters. At peak generation, the 440-foot turbines will be capable of producing 454 megawatts (MW) of renewable electricity, or enough to meet the needs of 420,000 homes. The expected average production of Cape Wind will be approximately 170 MW, or about 75% of the electricity demand for tourist hotspots Cape Cod, Martha’s Vineyard and Nantucket Island combined. The project could offset close to a million tons of carbon dioxide every year and the consumption of 113 million gallons of oil annually.
But what Cape Wind President Jim Gordon believes is a well-supported effort to kick-start American energy independence has faced continuous opposition since its proposal in 2001, mainly by the Alliance to Protect Nantucket Sound, a group formed in direct response to the project. On their website, the Alliance contends that the wind farm will be a visual and noise disturbance that could harm birds and aquatic life, destroy the local commercial fishing industry and threaten marine vessel navigation and air traffic control.
The Alliance also disagrees with how the project is being funded. In May of 2010, Northeast energy delivery company National Grid agreed to buy half of the power generated by Cape Wind over the first 15 years of operation for 18.7 cents per kilowatt-hour, a rate that’s more than double the current average for electricity. The Alliance argued that the agreement between Cape Wind and National Grid is unconstitutional and not in the public interest, and along with the Associated Industries of Massachusetts, New England Power Generators Association and TransCanada Power Marketing, challenged the deal in the Massachusetts Supreme Court this past September. They posited that Cape Wind’s power purchase agreement is unfair because National Grid did not undergo a competitive bidding process with other out-of-state electricity providers that could have resulted in a lower price for its wind power.
“The Cape Wind power purchase agreement is exactly the kind of contract that we need to avoid if we are serious about combating global climate change without unduly burdening Massachusetts households and businesses,” said Audra Parker, president and CEO of the Alliance. “Cape Wind and National Grid deliberately entered into the contract without the benefit of competitive bids and now ratepayers are saddled with a contract that is well more than double that of other renewable energy resources.”
The court disagreed. Last week, it unanimously upheld the National Grid power purchase deal, declaring that the Massachusetts Department of Public Utilities was right to approve it earlier in the year and was not violating the constitution in doing so.
“This is a major step forward for Cape Wind,” project spokesman Mark Rodgers said. “It’s a big milestone for the project and will bring us closer to creating jobs and making Massachusetts cleaner and energy independent and a leader in offshore wind power.”
The decision still leaves Cape Wind with only half of its needed financing and an insufficient number of customers for the electricity it will produce. The project also encountered a major roadblock this past October, when the U.S. Court of Appeals rejected the Federal Aviation Authority (FAA) claim that Cape Wind was “no hazard” to aircraft. No construction will likely be allowed to take place until the FAA conducts additional reviews.
“The good news is the increasingly clear reality that Cape Wind will never be built,” Parker said. “Cape Wind has been denied FAA approval, has been denied critical federal loan guarantees, has no utility willing to buy half its power and cannot find investors. Those facts alone render this decision moot.”
Despite over a decade of tribulation, however, Gordon still has faith the project will be built and that construction could begin as early as 2013. “You have to recognize this is the first offshore wind farm in America, and we’ve helped evolve the regulatory legal framework for these projects,” he told Boston’s Fox 25 News after last week’s decision. “We believe in this project. We have patience.”