Library filed under Offshore Wind from Massachusetts
Only two of four wind energy lease areas in federal waters south of Martha’s Vineyard received bids in an auction today and the sale prices were millions of dollars lower than previous auctions for leases of smaller sizes off other coastal states, according to statements by federal energy officials.
Cape Wind has been suspended from New England's wholesale electricity market and has pulled out of a lease for land that had been earmarked for staging the 468MW project. "In general, suspensions are a result of a participant not maintaining a minimum amount of collateral and/or not complying with other financial assurance or billing requirements."
The typical price of a tax equity investment for an on-shore project that carries no debt is between 7.5 and 8.5 percent. By adding debt to the project, the range increases to the mid teens. ...“Admittedly it is being built by Siemens but there are also a lot of local contractors. ...It’s complex, so that would make any first time investor in the offshore industry nervous. So that puts your price of tax equity north of the mid teens, which makes it incredibly expensive."
Cape Wind was the wrong project, at the wrong time, and the wrong place. It was too big and costly. Its impacts were poorly mitigated and its benefits highly questionable. In the end, it was the regulatory arrogance of the Massachusetts Gov. Deval Patrick and the Obama Administrations that did the most harm. A lot of people were offended and willing to stand up to the abuses. Remember, it was Massachusetts’ spirit that triggered the Revolutionary War.
Cape and Islands legislators from both parties were hardly heartbroken last week seeing National Grid and Northeast Utilities deal a potentially fatal blow to Cape Wind.
Following the announcement Tuesday by two electric utilities that contracts to buy power from the wind farm planned for Nantucket Sound had been terminated, opponents were declaring Cape Wind finally defunct, after 13 years of contentious public debate, permitting and court battles. But not everyone agrees.
Gordon wrote that the lawsuits had impeded Cape Wind from meeting the required milestones and argued that the litigation triggered a so-called force majeure clause in the contract that extended the deadlines for Cape Wind. ...“The challenges alluded to by Cape Wind were ongoing and well known to the parties at the time the agreement was entered into and were not the type of events that would excuse Cape Wind from performing its obligations,” said Caroline Pretyman, a spokeswoman for Northeast Utilities.
NStar officials, who released copies of the letter they sent Cape Wind, said the project had failed to complete financing for the wind farm and begin construction by the end of 2014, as required by the power purchase contract. NStar said Cape Wind could have extended the deadlines for two additional six-month periods by paying a deposit of nearly $1.3 million, but chose not to do that.
State waters in the Martha’s Vineyard and Gosnold areas that were designated in 2009 as possibly suitable for wind power projects, pending further study, were deemed unfit for large-scale wind energy in an updated ocean plan released Tuesday.
Ian Bowles, who as Patrick’s first energy and environment chief helped shepherd the offshore project, said Tuesday’s news may have spelled the end for Cape Wind. ...The jeopardy in which Cape Wind finds itself reflects a changed energy market, in which developers bear more risk than the eventual ratepayers, Bowles said.
“It’s all being paid for by people’s electric bill every month and hundreds of millions of dollars in subsidies. It's just so much money that’s coming from federal tax payers not just in Massachusetts,” Sullivan said. “The estimates for the completion of Cape Wind have more than doubled since it was first proposed.”
While Rodgers said Cape Wind was working hard to make the wind farm a reality, court documents filed earlier by the company’s president indicate that may not be possible. In a court affidavit filed in July, Cape Wind President Jim Gordon said financing on the project needed to close by the end of September 2014 to have a chance at beginning construction on the project before a critical Dec. 31 deadline next year.
Cape Wind will never be more than an unsightly trophy to the persistence of its developer and to the skills of a few players in state politics. Through political luck and skill, and thanks to a lock on National Grid and NSTAR business, Cape Wind might yet succeed in shoehorning this project into Nantucket Sound.
The circular logic of REC market fundamentals would have low REC pricing jeopardizing future development. As renewable energy project profit margins get squeezed, fewer projects will be built and forward REC prices would rebound as forward supply tightens.The worry is that offshore wind projects could break this self-correcting market logic in the New England Power Pool (NEPOOL).
Playing out in Massachusetts is a saga in which a private developer is using his political connections to trump the interests of state electric ratepayers - and in the process creating a precedent for much broader misuse of governmental power. The saga involves a court case in which state officials invoked an arcane provision of the U.S. Constitution to deny aggrieved ratepayers access to federal court.
New Bedford, MASSACHUSETTS -- During 2010 Massachusetts Governor Deval Patrick announced he wanted to build an ocean wind turbine port named the New Bedford Marine Commerce Terminal.The proposed harbor terminal is located in one of the most toxic marine environments in the world. Governor Patrick estimated the South Terminal ocean wind turbine project at around 35 million dollars. The estimate was low because he was denied financing for an ocean wind turbine barge that asked taxpayers to build the 91 million dollar “ship to no where” for ocean wind turbine contractors.(Note: the R.D. MacDonald barge is being built in New Jersey)
While landlubbers may see offshore wind as simply a promising new industry that could bring new jobs, the fishermen who will have to work along these turbines ...[are] worrying about how many days they can go out to sea, they say they now have to worry about giant steel structures getting in their way and impeding their catch.
The US government is promising to back the controversial Cape Wind project with $150 million, federal officials said, signaling a vote of confidence that the offshore wind farm will get built.
On Monday, state and federal officials tried to fill in the blanks for about 40 attendees at a public meeting inside the Katharine Cornell Theatre on Spring Street, but admitted many answers would come only once companies bid on the area and submit specific proposals.
"If instead of a judicial robe, I were to wear the hat of John Muir or Milton Friedman, I might well conclude that the Cape Wind project should have been built elsewhere (or not built at all), or that the NStar-Cape Wind contract should never have been approved," Stearns wrote. ...The banks expect to provide more than $400 million in debt themselves in addition to $900 million in potential financing from other sources.