A wind/solar energy project – potentially featuring twin wind turbines with props topping 400 feet, and developed through an innovative public-private partnership with the city – is being eyed for the Blackburn Industrial property of a resurgent Gloucester Engineering.
If fully realized, the project – two wind turbines and a solar installation on the roof of the plant where Gloucester Engineering, now owned by Blue Wolf Equity Partners, produces capital machines needed to make plastics – could involve as much as $15 million in capital investment, according to project consultant Richard Kleiman.
Kleiman provided an overview of the concept to the City Council earlier this week.
Meanwhile, the Council also received a letter from Varian Semiconductor Equipment Associates’ attorney Michael Faherty, asking for an extension of permits granted to that company before the onset of the global economic decline. Varian’s already-approved proposal calls for two giant turbines for its own renewable energy project, basically a block away from Gloucester Enginrering.
“Varian expects to have a supply contract in place shortly, and a construction contract in place before the end of the year,” Faherty wrote. “Once a construction contract is in place, Varian plans to move swiftly in commencing construction of the project.”
Varian shelved the investment during the downturn which delivered the company stronger; the company was acquired for about $5 billion in stock by Allied Materials last week in a deal that includes a commitment to keep the company’s campus in Gloucester.
Varian’s permits for its wind energy project, however, are due to expire June 11.
The Gloucester Engineering project faces tight deadlines of a different type, Kleiman said.
The owners face an end-of-the-year expiration for qualification for a federal investment tax credit program, and needs to be able to demonstrate an ongoing project.
The concept for the Gloucester Engineering project involves use of a state renewable-energy initiative that provides net meeting credits for electricity produced and supplied to the grid.
As explained to the council, the developer, a property management company employed by Blue Wolf, would make the capital investment in the renewable energy technology, then run it through a meter owned by the city and would share the metering credits with the city.
Terms of the split and other elements in the public/private partnership are subject to negotiations, according to city Planner Gregg Cadematori.
Kleiman’s presentation spoke of the city’s receiving 5 percent of the metering credit for electricity produced for the grid, with 95 percent going back to the developer, Equity Industrial Partners.
At that split, he estimated the city would be able to offset about $106,000 a year in electric costs – a figure that could go higher, he said, if energy prices continue rising.
The project would be organized under the state’s Green Communities Act – and Gloucester has been designated as one of the state’s Green Communities. The partnership with the city avails the developer of preferable position for state approval.
Varian’s project was permitted as a simpler capital investment in renewable energy for the tax benefits to encourage such diversification in production methods.
The more complex approach proposed for the Gloucester Engineering site does not have extensive precedent, Cadematori said.
“There are not a lot of these yet,” he explained.
Kleiman said Gloucester Engineering has been losing plant and worker efficiency by summer brownouts, and has an intense need for power to make the machinery that is shipped to firms that make plastics products.
Varian, too, uses immense amounts of power to make its tools which are shipped to chipmakers, primarily in Asia.
The City Council is the special permit granting authority for wind turbines, which have yet to make a major appearance on the municipal horizon.
Ward 1 Councilor Paul McGeary, whose district includes the industrial park, told the Times Thursday he believes the Gloucester Engineering project is a good one though “the fine print needs to be examined closely.”
“On its face,” he said, “the city will receive direct payments that could defray as much as a tenth of its electrical costs —-as much as $100,000 annually – at no risk to the city.
McGeary noted that “Gloucester Engineering has been nursed back from the brink and it’s an important part of our economic infrastructure that we should support.”
Kleiman said Gloucester Engineering, which was acquired and pulled out of bankruptcy last year by Blue Wolf, has been adding jobs, but is still “not near capacity.”
“The impact on the neighbors will be minimal,” McGeary continued. “I have walked the neighborhood closest to the proposed installation and met with neighbors at ward meetings. The proposed installation is far enough away and of a scale that neighborhood impact will be minimal.
“Of course, there will be in-depth environmental studies, including studies of the impact of noise and so-called ‘flicker’ that will be conducted as part of the permitting process,” he added. “These will help ensure or mitigate any potential adverse impacts on the neighborhood.”
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