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Tax credits complicate Cape Wind, South Terminal schedule

NEW BEDFORD – Cape Wind may not be able to wait for the completion of South Terminal in order to start construction if it wants to take advantage of federal tax credits, according to state officials.

In early January, federal lawmakers passed legislation that extends production and investment tax credits for wind-energy projects that begin construction by Jan. 1, 2014.

The South Terminal project, which is meant to be a staging area for Cape Wind construction, is scheduled to be completed by the end of 2014.

“There is a question of whether placing the foundations of Cape Wind’s turbines may need to come during the final phases of South Terminal Construction,” Alicia Barton, CEO of the Massachusetts Clean Energy Center, told The Standard-Times editorial board Friday. “We have been in close coordination with Cape Wind to match up the construction schedules.”

The deadline for construction bids on the South Terminal Project was Friday, and the organization has up to 90 days to award a contract. Once the contract is awarded, construction is expected to take 19 months.

Barton said that in order for Cape Wind to be eligible for the federal tax credit, it must “commence construction” before the end of the year, but the federal government has not yet clarified what exactly commencing construction means.

Barton said there is a distinct possibility that Cape Wind will have to place the monopilings, or foundations, of at least some of the project’s 130-turbines before the Jan. 1 deadline.

“We are committed to make sure that staging happens either at South Terminal or at least in the commonwealth,” she said.

Even if the staging of foundations and monopilings would have to be done at another site, Barton said she is confident that the staging of other turbine parts, such as the multi-ton weighing towers, blades and gearboxes, would take place in New Bedford.

“South Terminal is purposely built for this,” she said.

Beyond Cape Wind, Bill White, MassCEC’s director of offshore wind sector development, said South Terminal would be able to serve other offshore projects. Massachusetts is home to two additional wind areas, one of which is the largest area designated for offshore wind farms along the East Coast. He said the terminal could serve developers working on offshore wind farms as far away as Maryland.

After the terminal is complete, Cape Wind is expected to use it for two more years, at which point, White said, other wind energy areas should be ready to start putting turbines in water.

“The timing could line up just right,” he said.

White said New Bedford and Massachusetts are already at an advantage for attracting business from developers interested in wind energy in other states.

“Every state is thinking and talking about how they are going to be the hub for offshore wind in the United States,” White said. “We are actually doing it, so they are all competing for second place.”