Cape Wind inks deal for transmission cables

The company seeking to build a wind farm in Nantucket Sound announced Thursday that it has contracted with Prysmian Cables and Systems USA to supply the transmission cables for the offshore project.

The contract, along with another signed with Caldwell Marine International, based in New Jersey, to install the project's underwater cables, was hailed as a milestone in a press release from Cape Wind Associates LLC.

"They are capable companies that will help establish a domestic offshore wind supply chain," Cape Wind President Jim Gordon said in a statement included in the release.

Cape Wind spokesman Mark Rodgers declined to disclose the terms of the contracts.

Prsymian, based in South Carolina, will manufacture the cables at its facility in Abbeville, S.C. Its New Jersey-based installation team will install them between landfall in West Yarmouth and NStar's sub-station in Barnstable.

In July, Cape Wind announced that it had signed a $15 million contract with the Lawrence-Lynch Corp. of Falmouth to build duct banks that will house the cables.

Cape Wind hopes to complete financing for the project in the third quarter of this year and begin upland construction by the end of the year, Rodgers said.

Using specialized vessels and equipment, Caldwell Marine International will install the underwater cables. Cape Wind aims to begin the process next year.

"We are thrilled to be expanding into the offshore wind sector and we are proud to help build Cape Wind, America's first offshore wind farm," Caldwell Marine International President Rolando Acosta said in the release.

Thursday's announcement was the latest Cape Wind has made in the past two years regarding the financing and construction of the wind farm. In June, a Danish pension fund announced it would provide a $200 million loan for the $2.6 billion project.

Last month, Gordon announced in a speech at the GreenPower USA Offshore Wind Conference in Boston that Cape Wind had added a $600 million loan from EFK, a Danish credit agency, and was edging closer to the half-way financing mark.

Bank of Tokyo-Mitsubishi UFJ, as the lead financier, is expected to coordinate as much as $2 billion in debt for Cape Wind. And in December, Cape Wind signed a deal with Siemens to build the project's turbines, along with an electric service platform to convert its power for transmission.

Siemens has also offered to invest $100 million in the project.

Cape Wind is counting on keeping costs down through an investment tax credit that expired at the end of 2013. The company will qualify for the tax incentive if it can prove that it had spent 5 percent of the project's total construction cost by Dec. 31. Cape Wind officials have said they expect to qualify for the tax credits but also continue to push for them to be extended.

Cape Wind will have a contract announcement about the general contractor responsible for installing the foundations of the turbines and erecting the wind farm in Nantucket Sound in the "near future," Rodgers said.

Despite Cape Wind's claims of progress the project's opponents continue to argue it is dead in the water.

"At the end of the day it doesn't matter," said Audra Parker, president of the anti-Cape Wind group, the Alliance to Protect Nantucket Sound.

The project continues to face increased opposition, numerous lawsuits, financing difficulties and looming deadlines, Parker said.

The announced loans are conditional and account for only part of the financing that will be required to build the turbines, she said.

"Despite having locked in high-priced contracts they have had difficulty financing," Parker said.

Those contracts with NStar and National Grid will also expire by 2015 and, if the project isn't built, Cape Wind is unlikely to be able to meet new requirements in the state's Green Communities Act that require competitive bidding given the lower cost of land-based wind, Parker said.

The act has been amended to require competitive bidding.

"When you have a project that pre-sold power and it has yet to attract any U.S. financing you have to ask yourself why," she said.

Wind farm opponents filed their latest lawsuit against Cape Wind in January, just a day before the U.S. Court of Appeals in Washington denied an appeal of the Federal Aviation Administration's approval of the project.

Cape Wind is still waiting for a decision from the U.S. Department of Energy on whether it will receive a $500 million loan guarantee. Gordon and energy department officials have declined to comment on the status of Cape Wind's application.

The wind developer also has yet to complete preconstruction surveys, and still needs authorization from the National Marine Fisheries Service for the construction's harm to marine mammals.

Parker also pointed out that Cape Wind has previously signed with a U.S. company for work related to the project only to have the deal fall apart.

Massachusetts Gov. Deval Patrick announced in 2010 that Middleboro-based Mass Tank would build the foundations and other steel components of the 130-turbine project but two years later the companies announced the deal was dead. Cape Wind officials said they had concerns about Mass Tank's ability to fulfill the requirements of the deal and Mass Tank claimed the company was unfairly dropped from the project.