May 03, 2010
Ken Silverstein
EnergyBiz Insider
Editor-in-Chief
The news is rippling all along the Atlantic shoreline: The Obama administration has given what may be the final blessing to the offshore Cape Wind project to be built in Nantucket Sound.
While the administration never tipped its hand until last week's announcement, it was a foregone conclusion that it would approve the offshore facility given that the foundation of its economic, energy and environmental program has centered on growing green generation. As with its offshore oil and gas policies, the U.S. Department of the Interior said it would strike a balance between energy production and the environment, which in this case has meant cutting the number of wind mills from 170 to 130.
"This will be the first of many projects up and down the Atlantic coast," says U.S. Interior Secretary Ken Salazar, who adds that he is "confident" that the Cape Wind project will withstand the much anticipated legal assaults and become operational by year-end 2012.
Already, a multitude of states and federal agencies have reviewed the proposed offshore facility. The U.S. Army Corps of Engineers, which studied the Cape Wind project for three years, says that several hundred birds would be killed annually while fish and shellfish beds would be displaced. It also said that the national historic properties located near Horseshoe Shoal where the 24-square-mile project would be based, would have their seascape changed.
But the corps' report goes on to say that the economic and overall environmental benefits would outweigh the costs. The Obama administration's formal position follows on the heels of an ugly oil spill in the Gulf of Mexico that serves to remind the nation that it needs fuel diversity and that no energy source is a panacea.
When all is said and done, the wind farm will cost as much as $2 billion -- with some of that money going to fight upcoming court battles. But in the end, it would generate more than 468 megawatts of wind power that would supply three-quarters of the energy that the residents of the island get.
The move has pit neighbor against neighbor in this affluent community, with some saying that the wind energy would be far preferable to fossil-fired generation. Others, meanwhile, are arguing that the tall windmills would be an eyesore. Needless-to-say, all residents understand that the added energy would is necessary not just to meet to the expected future demand for power but to also comply with the state of Massachusetts' renewable portfolio standards.
"Such forward-thinking decisions are necessary for the U.S. to realize the many environmental and economic benefits of offshore wind," says Denise Bode, executive director of the American Wind Energy Association.
Emotions Strong
To be sure, emotions are running high with opponents of the development arguing that the wind farm would forever spoil the pristine natural surroundings. They are also saying that it would hurt tourism and local fisheries.
The Alliance to Protect Nantucket Sound is making a business case, noting that it will cost billions to connect the wind facility to a transmission grid so that the electricity can be transported onshore. That will double or triple the overall costs when compared to the conventional generation on which the island now relies.
Audra Parker, who is the chief executive of the group, says that as many as a dozen environmental and residential organizations plan to file lawsuits to try and stop the deal. "We will not stand by and allow our treasured public lands to be marred forever by a corporate giveaway to private industrial energy developers."
While many legal experts are on record saying that the nearly decade-long fight has already been legally vetted, further proceedings might deter investors from banking future offshore wind sites -- or any other untraditional source of energy. Altogether, about 11 other offshore deals are in the works along the Atlantic coast.
At least $2 trillion will be necessary to beef up the country's generation and transmission sectors over the next 20 years, all to meet the expected annual increase of 1 percent to 1.5 percent in the demand for power. In Cape Wind's case, it will be paid mostly by private developers, although it is eligible for federal stimulus monies.
The beauty of offshore projects is that the winds are typically more powerful than those on land and that the electricity can be transported to urban land-based centers. Here in this country, advocates say that they are necessary to meet state requirements -- like Massachusetts, which says that 20 percent of its power must come from green energy by 2020. They also point to Europe, which now has 33 offshore wind farms in 8 countries.
"This bold step by the Obama administration sends a signal that the United States is serious about securing its energy future and is willing to take action to make that happen," says Tom King, president of National Grid in Massachusetts, which says that it is now ready to move forward to buy the power generated by Cape Wind.
The controversy surrounding an energy development on a well-established waterway is to be expected. Other proposed offshore facilities will endure the same kind of rigor. But Cape Wind has withstood the pounding so far because of the crucial, bipartisan political backing that includes that of the White House. To its thinking, Cape Wind's success is central to the nation's new energy charter.
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