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Vineyard Power cooperative joins partner in bid on wind  

Credit:  By MIKE SECCOMBE, Vineyard Gazette Online, www.mvgazette.com 29 April 2011 ~~

Compared with the other nine developers who have expressed interest in building commercial-scale wind farms across some 3,000 square miles of federal ocean south of Martha’s Vineyard, the Vineyard Power cooperative looks like a minnow.

The list of those who had responded by the deadline for lodging expressions of interest with the U.S. Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) last week includes many of the major players in the nascent offshore wind energy industry, among them Energy Management, Cape Wind and other known names like Neptune and Bluewater.

By comparison Vineyard Power, the local cooperative set up with the aim of bringing cheaper, sustainable electricity and related jobs to the Island, is small. It is a community organization with one permanent staff member, a budget of somewhat less than $150,000, and some 1,100 members who have joined to date, as its president Richard Andre put it this week, on the basis of “a dream, a vision, of what we wanted to create.”

That vision has been recently super-sized, as it turns out in the proposal submitted to BOEMRE.

Vineyard Power has formed a partnership with another, much larger entity, Offshore MW LLC, an offshore wind developer backed by the huge Blackstone venture capital group. A sister company to Offshore MW is in the final stages of financing a 288-megawatt project in the North Sea off the German coast.

The plan unveiled this week envisions a development that would ultimately have a capacity of 1,000 megawatts, about 25 times what Vineyard Power first contemplated and more than twice that of Cape Wind.

The Martha’s Vineyard Offshore Wind Alliance, as the partnership is called, expressed interest in leases covering some 200 square miles of ocean, beginning about 14 miles south of the Island and extending out to about 33 miles offshore.

About half that area would be buffer zone, but the plan would ultimately see an area of ocean larger than the Vineyard itself sprout 100 or so turbines.

The proposal suggests a construction port in New Bedford and a possible operations port in the Vineyard Haven harbor. A letter of support from Vineyard Haven dock owner R.M. Packer Co. is included with the submission.

The submission speaks about the impact on local employment, the environment, the qualifications of the bidders, even the timeline – full-scale operation seven or eight years from now. It is comprehensive and ambitious.

Not unreasonably ambitious, though, said Mr. Andre, who met with the Gazette this week to discuss the proposal, along with Vineyard Power board member Susan Wasserman and Offshore MW vice president Erich Stephens.

Mr. Andre said in the end it only made sense to form a partnership with a larger entity, a move he said was sanctioned in concept by members of the cooperative late last year.

“The state has decided its objective is 4,000 megawatts to be developed off the coast of Massachusetts,” Mr. Andre said. “The wind turbines were coming, the federal and state governments had policy to put this into place. Our rationale was that if the local resources are going to be developed, we should own and benefit locally from them, at the same time knowing it was going to be part of a much larger development that went on out there.”

Economics are another factor behind the partnership with Offshore MW, he said.

“In our original business plan we estimated that just to go to get the permit, the predevelopment work, $5 million needed to be raised. That was money that was 100 per cent at risk,” he said.

It was a big risk to take for a small player looking to generate 40 to 100 megawatts of power for a small Island.

And that is just the predevelopment cost; the ultimate cost, Mr. Andre, said, was about $190 million, “the largest project Martha’s Vineyard has even contemplated.”

The end result was a memorandum of understanding signed between Vineyard Power and Offshore MW, and the expression of interest in a lease submitted to state and federal authorities last week. The actual applicant is Offshore MW, not Vineyard Power, due to the fact that Offshore MW has actual legal standing with BOEMRE to hold a lease.

But the benefits of this newly formed partnership work both ways, Mr. Stephens said.

“In a project of this scale, having good relations with the local community is key. And what better way to do that than to be partnered with a local cooperative?” he said.

Mr. Andre said Vineyard Power already has put in a lot of work establishing what would be acceptable to Islanders and what would not. The cooperative has done surveys to find out how far the turbines had to be offshore before they were visually acceptable. The answer was beyond about 10 miles.

The cooperative has collated all the available data about marine resources, particularly fishing grounds, and talked to local fishermen to find out their concerns. As a result, the lease blocks the partnership nominated fall between major fishing grounds to both the east and west.

Furthermore, Mr. Andre noted, both the state and federal governments have encouraged interested developers to work with local interests and were under some pressure to give preference to projects with a local base. A couple of hundred Vineyard Power members sent letters to the federal government advocating that. So has the Martha’s Vineyard Commission.

Although Mr. Stephens frankly doubted whether BOEMRE would prefer proposals with a community element.

“We think it will be a straight bidding process, the leases going to the highest bidder,” he said.

But whether that means applicants simply enter sealed bids, or whether it will be an auction process, he said is unclear.

What is known now is that four other hopeful developers – Energy Management, Fishermen’s Energy, Iberdrola Renewables and No Fossil Fuel – have a competitive interest in the same blocks that the Offshore MW and Vineyard Power are looking at.

Beyond that are multiple other considerations, among them the availability of federal tax credits for renewables, and state and regional actions to ensure a market for them.

The progress of wind power development in the RFI area depends on “a whole lot of levels of pubic policy,” said Mr. Stephens.

Mr. Andre said there is not much Vineyard Power can do about that, except to keep lobbying.

Meanwhile, the cooperative has other priorities, chief among them signing up more members. The end goal is to bring in 8,000 members which would represent about half the Island, Mr. Andre said. As a result another large membership drive is planned for the summer. Membership in the cooperative costs $150, but a recent matching donation will take $50 off the next 100 memberships.

He also said the organization is pushing ahead with plans to install about one megawatt of solar power on the Vineyard, and last month chose South Mountain as its construction partner.

But the central project remains the emerging offshore wind plan.

“We are committed to this because we think it is the right project for the community,” Mr. Andre said.

A copy of the Vineyard Power and Offshore Wind MW proposal submitted to BOEMRE is available for public inspection at the Vineyard Power Office off State Road in West Tisbury, at the West Tisbury Public Library and the Martha’s Vineyard Commission office in the Olde Stone Building in Oak Bluffs.

Source:  By MIKE SECCOMBE, Vineyard Gazette Online, www.mvgazette.com 29 April 2011

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

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