May 13, 2011

Fed funding in doubt, may be gone with Cape Wind

By Staff And Wire Reports, 13 May 2011

Cape Wind’s bid for government loan backing has been put on hold, potentially removing a key source of financing for the controversial offshore renewable-energy project.

The U.S. Energy Department has decided to focus on applications that can be processed by Sept. 30, the expiration of the agency’s loan-guarantee program.

Experts say Cape Wind, the nation’s first offshore wind project, will have a harder time lining up financing without federal backing.

“As a DOE loan guarantee would substantially reduce costs to Massachusetts electricity consumers, Cape Wind will continue to pursue the matter,” developer Cape Wind Associates said in a statement to Bloomberg News.

The $2.6 billion project – which secured a final federal permit for its construction and operation plan last month, a decade after it was first proposed – calls for 130 turbines in Nantucket Sound.

The developer is still trying to find a buyer for half of the 468-megawatt Cape Wind’s power, with only National Grid on board.

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