Cape Wind wins federal construction permit

Charlottesville, Virginia (Platts)--19Apr2011/219 pm EDT/1819 GMT

Construction of Cape Wind, the 130-turbine wind farm set to be built off the coast of Massachusetts, could begin as early as the fall, according to US Secretary of the Interior Ken Salazar, who announced approval of the project's construction and operations plan Tuesday.

Under development by Boston-based Energy Management Inc., the Nantucket Sound wind farm has been in the works for about a decade. Its progress was delayed by a well-funded Cape Cod opposition group that continues to challenge Cape Wind in court. Cape Wind has, however, won all of its key regulatory approvals.

Salazar said the Department of Interior "has taken extraordinary steps to fully evaluate Cape Wind's potential impacts on [the] environmental and cultural resources of Nantucket Sound. By signing the construction and operations plan today, we are even closer towards ushering in our nation's first offshore wind energy facility while creating jobs."

The Cape Wind project calls for 130 turbines, each with a 3.6-MW capacity and 440-feet maximum height. The turbines will be offshore of Cape Cod, Martha's Vineyard, and Nantucket Island.

Approval of the COP permit, granted Tuesday by the Bureau of Ocean Energy Management, Regulation and Enforcement, was a necessary step before construction of the project could begin.

"After a thorough review of environmental impacts, we are confident that this offshore commercial wind project -- the first in the nation -- can move forward. This will accelerate interest in the renewable energy sector generally and the offshore wind sector specifically, and spur innovation and investment in our nation's energy infrastructure," said BOEMRE Director Michael Bromwich.

The project has secured a 15-year power purchase agreement with National Grid, which will buy half of the project's output, beginning at a price of 18.7 cents/kWh in 2013 with a 3.5% annual escalator.

NStar, Massachusetts' other major utility, is seen as the other logical buyer of the project's output, but so far the company has balked at signing a contract with Cape Wind. NStar instead has been striking deals with land-based renewable energy projects to meet state green energy requirements.

--Lisa Wood, newsdesk@platts.com

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