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Siemens offers financial boost for Cape Wind  

Credit:  By Patrick Cassidy, Cape Cod Times, www.capecodonline.com 22 June 2011 ~~

The company that will supply turbines for Cape Wind is still willing to help finance the offshore wind farm even though a federal loan for the project has fallen through, Siemens AG Chief Financial Officer Josef Kaeser said in an interview Tuesday with Bloomberg News service.

Cape Wind Associates LLC officials confirmed on Tuesday that there have been discussions between the two companies about financing.

“We’ve been working with Siemens for several years now with respect to the turbine supply and services agreement,” Cape Wind president Jim Gordon said. “I think Siemens understands the great potential that the U.S. offshore wind market has.”

In the interview with Bloomberg, Kaeser said he had no doubt that Cape Wind will go forward.

A spokeswoman for Siemens wrote in an email to the Times that Kaeser’s comments were an accurate characterization of the company’s position on Cape Wind.

Siemens and Cape Wind officials announced in April 2010 that Siemens Energy Inc., the U.S. subsidiary of the German-based company, would supply the 3.6-megawatt turbines for Cape Wind.

Cape Wind is gratified that Siemens is interested in participating in the project, Gordon said, adding that his company continues to put together a financing plan. Gordon declined to provide more details on other potential investors in the project.

Cape Wind still plans to begin construction on the wind farm before the end of the year or by the start of next year, Gordon said.

“We’re hopeful,” he said.

National Grid has agreed to buy half the power produced by the 130-turbine wind farm, but Cape Wind has struggled to find a buyer for the other half. The National Grid deal calls for the utility to pay about 19 cents per kilowatt-hour for the power, a price that will increase 3.5 percent per year during the contract’s 15-year lifetime.

The additional cost of Cape Wind’s power for the average residential ratepayer in National Grid’s territory would be $1.50 per month, according to the utility’s calculations.

Cape Wind’s opponents argue that the cost to businesses will be much greater and that the project will end up costing consumers far more than other sources of power.

Financing for the project has also been in doubt, especially in light of a decision by the Department of Energy to put a nearly $2 billion loan guarantee for the project on hold.

Opponents say the federal government’s decision is a sign of the project’s weak financial prospects. Cape Wind is expected to cost more than $2.5 billion to build.

The project also faces a host of legal challenges. The Massachusetts Supreme Judicial Court is expected to hear one of the lawsuits challenging the high cost of the project in September.

Kaeser’s remarks mirror a statement made by a Siemens official last year and are nothing new, said Audra Parker, president and chief executive officer of the anti-Cape Wind group, the Alliance to Protect Nantucket Sound.

“Cape Wind still faces the same challenges legally and financially with 10 lawsuits and no buyer for the second half of the power,” Parker said in a telephone interview from Washington, D.C., where a status conference is scheduled this afternoon on some of the federal lawsuits surrounding the project.

“For a project that’s bound to fail, there’s a lot of fanfare,” she said.

Siemens has a vested interest in seeing Cape Wind succeed, making their expression of support for the project suspect, Parker said.

The company is confident that it will survive various court challenges based on the merits of the project and the intense review it has undergone, Gordon said.

Siemens reported more than $100 billion in sales worldwide in 2010, including almost $20 billion by its U.S. subsidiary, according to its website.

The company has installed almost 8,000 wind turbines worldwide, according to the website.

Source:  By Patrick Cassidy, Cape Cod Times, www.capecodonline.com 22 June 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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