Cape Wind: Ten Years And Counting
By: Michael C. Bailey
Published: 08/12/11
On Wednesday, August 8, 2001, a newly formed cooperative calling itself Cape Wind Associates formally announced an ambitious plan to erect the nation’s first offshore wind farm in the waters off Cape Cod.
“We’re really excited about this project,” said James S. Gordon of what was then the Yarmouth-based firm Wind Management LLC, in the organization’s first official press release. “We’re preparing for an extensive and rigorous permitting process.”
Back then, “extensive and rigorous” meant a year to 18 months, and the entity now known simply as Cape Wind expected to have the Cape Cod Wind Farm up and running by 2004.
The review process formally ended in April when the US Department of the Interior’s Bureau of Ocean Energy Management Regulation and Enforcement (BOEMRE) approved Cape Wind’s construction and operations plan.
Construction is tentatively set to begin within the next 12 months and is expected to wrap up two and a half years later.
“The coming year is going to look like us doing the things we have to do to make this project a reality,” Mr. Gordon said during an hour-long phone interview with the Enterprise, “but it’s sad that it’s taken 10 years, and it’s unfortunate, particularly when you realize Europe and Asia have been putting offshore wind farms up and down their coasts” for the past two decades.
“The United States doesn’t have a single turbine in the water,” he noted, “and particularly when you put it in the context of the energy, environment, and economic challenges that the region faces, it’s sad and it’s unfortunate.”
“Sad and unfortunate” was a common refrain as Mr. Gordon reflected on a project that—despite its oft-stated promise of clean energy generation attached to a wealth of fringe benefits for the Cape and Islands—quickly developed into a source of controversy and heated debate. Today, a decade later, Cape Wind remains perhaps the Cape’s most divisive topic of conversation.
“There’s been a lot of passion invested on both sides. We’ve kept going because we believe that this is an important project for our nation’s energy future,” Mr. Gordon said. “We believe this project is going to set an important precedent, and it’s too important to not pursue with vigor and deliberate speed…Cape Wind is going to be built.”
Leap Of Faith
At the time of its unveiling, Cape Wind was touted as the future of renewable energy in the United States, and Mr. Gordon was looking to emulate the success of offshore wind power in Europe. Denmark erected its first offshore wind farm in 1991, and as of last year nine European countries had established 39 facilities with a combined capacity of 2,396 megawatts (MW).
Cape Wind, in comparison, has a maximum capacity of 454 MW. BOEMRE estimated Cape Wind’s average output would be 182 MW.
While America’s coastlines remain turbine-free as of this year, there are currently 38 active proposed offshore wind projects according to OffshoreWind.net. Most of those are sited for the East Coast and the Gulf of Mexico.
Mr. Gordon said this proliferation of projects is a direct result of Cape Wind taking its leap of faith. “What it did is it brought the idea of offshore wind, the potential of offshore wind, into the public arena,” he said. “What you now see is coastal states from Maine to South Carolina that are working extremely hard, putting policies together, to encourage the development of offshore wind.”
Such projects are traveling a smoother road, not only because they can learn from Cape Wind’s successes and setbacks, as well as from the wealth of scientific data amassed during the review process, but because they have one thing the Cape project utterly lacked in 2001: a formal, defined federal regulatory structure.
That was corrected in 2005 with the passage of the federal Energy Policy Act, which codified the review process for reviewing offshore renewable energy projects and granted lead permitting authority to BOEMRE (then the Minerals Management Service). Prior to the act, the US Army Corps of Engineers acted as the original lead permitting authority for Cape Wind because, under the Rivers and Harbors Act of 1899, the Corps had authority over construction in navigable waterways.
“We are very proud of the fact that Cape Wind has contributed to evolving the regulatory framework for offshore wind in the United States,” he said. “Our efforts, our dedication and persistence, seemed to resonate with a national audience of policymakers.”
Initially, few of those policymakers were in Cape Wind’s camp. About a year after the project launched, Congressman William D. Delahunt (D) became the first high-ranking elected official to speak in opposition to the project and championed an effort to have Nantucket Sound declared a national marine sanctuary—a move that, had it been successful, would have stopped the project cold.
In spring 2003, Governor W. Mitt Romney and US Senator Edward M. Kennedy (D) joined the opposition and spoke against Cape Wind for its potential negative impacts on the Cape’s tourism and fishing economies, the environment, air and marine navigation, and avian and marine life.
The proverbial winds of change began to blow in 2006, when Deval L. Patrick was elected governor and he made renewable energy development in general—and wind power in particular—a priority for his administration.
“You’ve got to give credit to Governor Patrick and his administration’s vision, and his leadership in trying to make Massachusetts a global leader in offshore wind technology” and the benefits therein, most notably job growth, Mr. Gordon said. “This is poised to be a very big industry for this region.”
The Patrick Administration’s pursuit of a wind energy industry base led to the establishment of the nation’s first large-scale wind blade testing facility, the Massachusetts Clean Energy Center’s (MassCEC) Wind Technology Testing Center in Charlestown, in May of this year. That facility was funded in part by a $24.7 million grant through the American Recovery and Reinvestment Act (ARRA)—one of five awards totaling $118.44 million dedicated to wind energy projects across the US.
Cape Wind gained another champion last year when Democrat William R. Keating was elected to succeed the retiring Rep. Delahunt. Mr. Gordon was quick to point out that Rep. Keating was the only person in either primary race or in the general election who openly supported the wind farm.
Changing Attitudes
Mr. Gordon said the shift in public officials’ opinions was reflective of a similar “sea change” in attitudes among environmental advocacy organizations and the public.
In 2009 the Association to Preserve Cape Cod (APCC) issued a formal endorsement, topping a list of endorsements from a range of organizations, such as the Maritime Trades Council, the Seafarers International Union, the World Wildlife Fund, Greenpeace, and Mass Audubon—many of which previously opposed the project, Mr. Gordon noted.
“This is all part of this evolution of the thought process and the attitude toward a new idea,” he said, “and this has been very affirming for us. That kind of support has helped us contend with what has been a very challenging development process.”
He also claimed that opinion polls conducted over the years likewise reflect an increase in support among the public, but that data are less telling. A review of more than a dozen surveys conducted between 2003 and 2010 revealed no clear, decisive trends in public opinion changing over the years. Support rates for Cape Wind have ranged from 34 percent to 84 percent in various surveys.
Mr. Gordon chalked up the initial outcry to a simple fear of the unknown, and said the public has become more familiar—and thus more comfortable—with the wind farm concept, thanks to the “comprehensive and exhaustive” Environmental Impact Statement (EIS) process, which invited scrutiny from 17 federal and state agencies.
The resulting 2,800-page document analyzed all the theoretical impacts of the facility, from the environmental to the economic. Some were dismissed as non-issues. Some were regarded as minor and, in many cases, resolvable problems.
A few impacts were deemed negative and unavoidable, but acceptable for the trade-off of the facility’s benefits.
That report proved critical in changing many hearts and minds, but one major skeptic remained—and to this day remains—and Mr. Gordon blamed the project’s many delays on this one entity: the Alliance to Protect Nantucket Sound, which he did not once refer to by name; throughout the interview he simply referred to the alliance as “the opposition group.”
Enter The Alliance
The alliance came together late in 2001 and began life as more of a grassroots coalition of residents and mariners concerned about the project’s potential impacts on local aesthetics, the environment, marine and air travel, the recreational and commercial fishing industries, and the local economy.
The organization later became a full-fledged nonprofit organization, with a stated mission to “protect Nantucket Sound in perpetuity through conservation, environmental action, and opposition to inappropriate industrial or commercial development,” according to the mission statement on its official website. It explicitly cites its opposition to Cape Wind “due to potential adverse economic, environmental and public safety impacts.”
Mr. Gordon refuted the alliance’s image as an environmental advocacy group based on its main financier: William Koch, who has personally donated more than $1.5 million to the alliance. Mr. Gordon said he viewed the alliance as a lobbyist for the fossil fuel industry—and Mr. Koch specifically—and it was more interested in undermining competing renewable energy projects through “propaganda and fear-mongering” than in protecting the sanctity of Nantucket Sound.
Greenpeace dissected the Koch connection in a 2010 report, “Bill Koch: The Dirty Money Behind Cape Wind Opposition.” That document detailed Mr. Koch’s connections to Koch Industries, a 60-year-old international conglomerate that records more than $100 billion in annual sales from petroleum refining, fuel pipelines, coal supply and trading, oil and gas exploration, chemicals and polymers, fertilizer production, ranching, and forestry products.
The alliance has filed and participated in numerous lawsuits and appeals against Cape Wind, none of which have proven successful, and Mr. Gordon believed the alliance has all but depleted its supply of viable arguments—“the red herring of the month,” as he called them.
Not that he expected the alliance to relent anytime soon, he added. “They’re just so dug in,” he said. “There are some people who have made a career of opposing this…it’s a mini-industry down there, and they just have a vested interest in keeping it going.”
Next Hurdle: The Economy
There are approximately a dozen lawsuits and appeals awaiting resolution, but Mr. Gordon did not view any of those as a significant obstacle. Rather, the project was now at the mercy of local, national, and international economic forces.
“We are in a very challenging economic climate,” he said, and that uncertainty means potential financiers might be hesitant to support any new major ventures until the economy stabilizes.
In June the German firm Siemens, which is providing the project’s wind turbines, announced it was interested in becoming a project financier, but that is one of the few details of Cape Wind’s business plan known to the public; Mr. Gordon is typically very guarded about the project’s financial particulars, and would only say that finding capital for construction is “something we’re working on.”
Unofficial estimates place the cost of Cape Wind’s construction at $2.5 billion, a figure Cape Wind officials have neither confirmed nor denied.
Cape Wind is also trying to find someone to purchase the remaining 50 percent of its power output. Last year the Massachusetts Department of Public Utilities (DPU) approved a 15-year power purchase agreement between Cape Wind and National Grid, in which Cape Wind will sell 50 percent of its power to National Grid at a starting rate of 18.7 cents per kilowatt hour (cents/kWh).
NStar made headlines earlier this year when it passed on an opportunity to buy power from Cape Wind and instead opted to purchase renewable energy from three land-based wind generation facilities: Hoosac Wind in Massachusetts, Groton Wind in New Hampshire, and Blue Sky East in Maine.
None of these projects have begun construction. Hoosac Wind has its permits but cannot begin construction until the DPU signs off on its contract with NStar. Groton Wind, a project of the Spain-based Iberdrola Renewables, received final approval last month and is expected to go online by the end of 2012. Blue Sky East received initial approval last week and could receive final approval next month.
The alliance is currently challenging the National Grid contract on the basis that it was not secured through a competitive bid process. The Associated Industries of Massachusetts, TransCanada, and the New England Power Generators Association have all filed similar, separate appeals.
6 Responses to "Cape Wind: Ten Years And Counting"
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The ocean wind project remains perhaps the Cape’s most divisive topic of conversation because it needs renewable energy credits,government loans and guarantees. The renewable energy funds come from a tax collected on both residential and commercial electric bills in Massachusetts .The government loans and guarantees come from the average Jill and Joe taxpayer .In fact an attempt to win a US Department of Energy loan guarantee has been placed on hold, in a setback by the nation’s first offshore wind farm to secure financing. Massachusetts residents remember when the "Big Dig" started in Boston at a proposed cost of 2 Billion dollars and here we are now 14 Billion dollars later with a leaking tunnel ,people being killed by falling ceilings and now a sink hole the size of four residential homes .The wind project oddly starts out with the same price tag of 2 Billion dollars ! Sound familiar ? We now know now that the cost of the underwater electric cables cost double the cost of the turbines bringing the cost up another 4 Billion form the original cost .The estimate of 2 Billion dollars for the original estimate still hasn't been adjusted for inflation. A commitment was made to the City of New Bedford that it would be the ocean wind turbine port for all of New England .The name of the ocean wind turbine port is being called the New Bedford Marine Commerce Terminal which is another taxpayer paid for ocean wind turbine being built for private ocean wind turbine contractors . Massachusetts has used 1.2 million in EPA funds designated for PCBs dredging in New Bedford Harbor to hire a Tacoma, Washington engineering firm to build the port . So here we have a project with taxpayer backed loans ,renewable energy credits ,ocean wind turbine port at tax payer expense all so our electric bills can be tripled over ten years !
How ocean power could go as high as 4 times the current rate : Under the current Massachusetts grid operators rules, the traditional power companies – gas, coal, oil – have to bid on power the day before they get paid, for example, 6 cents per kilowatt hour. Under the current rules, the commercial wind turbine companies automatically get paid the day they produce the power, for example, 18 cents per kWh, because they can only produce power when the wind blows. The grid operator has to take the renewable energy wind product first that day. The traditional power company is glad to stand down when the commercial wind turbine company is producing power. What the public needs to understand is that in Massachusetts, when the commercial wind company is getting paid the 18 cents, the traditional company that bid the previous day stands down and gets paid anyway. Thus, the cost to Massachusetts’ electric ratepayers is the 18 cents plus the 6 cents the traditional company bid the previous day. The cost per kilowatt hour could cost up to four times normal bid costs. Massachusetts needs to review the electric bid process and how it affects residential and business customers. Massachusetts is one of the few states to use the current formula.
Leave it to the Emptyprize to tell only one side of the story... This and the turbines in Falmouth already are the beginning of the end of a lovley clean quiet Cape Cod. being progresive is not always a good thing. It's all just about money and grants ... paving paradise to put up another parking lot. .. There are better ways to live. do you realize each of those turbines will be larger than a 747? yep it will... Do you know how much cement, energy, electrictity, fuel oil and fuss each one takes to install? A lot more than it can generate in a decade. What's gonna happen when they start to break down.. and they do! rubble piles in the ocean full of hydrolic fuel leaking onto our coastlines... very toxic stuff that fuel. But just get half the story now, promote it and say oops later... big oops, bigger problems, bigger bigger bigger stupidity.
The Greek government bought over three thousand commercial wind turbines at about 5 million per turbine .The electric upgrade cost them double the cost of the turbines. The warranty is up on those turbines and the Greek government is going under .The Greeks bought their own Trojan Horse . The problem with Massachusetts is that Gov Patrick wants to model the state of Massachusetts after the Greek plan . The regulatory framework for offshore wind in the United States is far to expensive !
Since I feel like poking this particular bear with a stick: http://capenews.net/blogs/snark-infested_waters/2011/08/13/arguments-that-dont-hold-water-or-wind-part-ii/
I agree, let us resist this technology and other green technologies so that we can stay reliant on oil and oil producing nations. This way these other nations can continue to manipulate our economy by modifying the cost of oil. Wind energy will not alleviate our dependence on oil but supporting wind technology and other green technologies will help us reduce our foreign dependency and help foster the development of new technologies. The present attitude of the populace on alternate energy systems has made the USA laughable in the eyes of developed countries. Investment and development of future technologies is what sparked many new business opportunities and what made this country a leader.