In 2009, The Providence Journal wrote about the race to build the first offshore wind farm in the United States, with projects off Block Island and Cape Cod at the front of the pack. Five years later, the race continues.
On a recent morning in Boston, Jim Gordon described what it has been like to suffer setback after setback in his quest to build the first offshore wind farm in America.
To much fanfare in 2001, Gordon proposed Cape Wind, a 130-turbine wind farm in the waters of Nantucket Sound. Thirteen years later, after beating back 17 lawsuits and still facing one more, he has started to feel like Walter White, the chemistry teacher turned outlaw drug chemist who is the protagonist of “Breaking Bad,” Gordon’s favorite TV show.
“I started out as a mild-mannered energy developer building natural-gas-fired power plants,” he said. “As I got more headlong into this industry, I realized the ruthlessness, the cunning of the cartels that compete with you.”
It was, of course, an exaggeration and was met with laughter as Gordon, the founder and president of Boston-based Energy Management, spoke at an industry conference that was attended by other offshore wind developers, including representatives of Rhode Island’s Deepwater Wind, the chief rival to Cape Wind.
But Gordon’s comparison nevertheless demonstrates the level of frustration that has been building over the years as he fights an opposition largely financed by William I. Koch, who owns property on Cape Cod within sight of the wind farm’s location and is the least-known of the three billionaire brothers who made their fortunes in fossil fuels.
The race to build the first offshore wind farm was always expected to be a marathon. But as time has gone on, it has grown into something more trying, a cross, say, between an ultra-marathon and an obstacle race.
Deepwater Wind has also experienced delays. When the Providence firm put forward a plan in 2008 to build the first of two wind farms off Rhode Island, a comparatively modest five-turbine demonstration project near Block Island, it was expected to be in the water by 2011 and in operation the following year.
Even though opposition has never grown into anything resembling what Cape Wind has encountered, the completion date has changed multiple times, to 2013, then 2014, then 2015. And now? The middle of 2016.
“Sometimes the smallest things can be the biggest obstacles,” CEO Jeffrey Grybowski said at the Offshore Wind Power USA conference.
So a finish line that was expected to have come and gone by now keeps getting pushed back. And all the while, more competitors have jumped in.
In 2006, Bluewater Wind pitched the idea of building a wind farm in Delaware nearly over the horizon in a bid to avoid the complaints about marring coastal views that have so dogged Cape Wind, which would be built about five miles from shore.
In 2008, Fishermen’s Energy proposed a five-turbine test project off Atlantic City and a future wind farm of 66 turbines elsewhere off the New Jersey coast.
That year also saw Deepwater Wind step forward with a plan to first build a small array about three miles southeast of Block Island and then follow it with a wind farm in Rhode Island Sound of 200 or more turbines.
When President Obama took office he called for more clean energy, in part to help reduce the carbon emissions that contribute to climate change. His administration moved to jump-start offshore wind. In 2010, after years of stasis, Cape Wind was finally awarded a lease for a swath of federal waters off Cape Cod, and soon afterward the Department of the Interior put in place an accelerated permitting process for other projects on the Outer Continental Shelf.
Two proposals in Maine followed, one from Norwegian company Statoil and the other from a consortium led by the University of Maine that offered up a plan for floating turbines.
But it’s really been in the last 12 months or so that the field has gotten crowded, with interest from start-up companies, established renewable power firms from Europe and a commitment from Dominion Resources, one of the biggest energy conglomerates in the United States.
Their entry into the market was spurred by the Interior Department’s decision to sell leasing rights to developers for tracts of ocean waters up and down the East Coast, the most promising place for turbines because of the relatively shallow depths and strong winds.
Deepwater Wind won the first lease auction in July with a bid of $3.8 million for two areas between Block Island and Martha’s Vineyard, where the company plans to build its bigger project.
Dominion, the behemoth based in Richmond, Va., that has focused its business on conventional fuels, won the second auction in September with a $1.6-million bid for development rights off Virginia. A third auction is expected to be held this year for an area off Maryland in which Dominion has also shown interest.
In February, the Interior Department awarded a lease for a floating wind farm off Oregon proposed by Seattle-based Principle Power, which has tested a prototype in Portugal. The project would be the first offshore wind farm on the West Coast.
Future sales are being planned in the near term for areas off New Jersey and Massachusetts, and, further in the future, off such states as Georgia and South Carolina. The list of companies that may bid include Spain’s Iberdrola Renewables, Ireland’s Mainstream Renewable Power, Offshore MW, which is connected to a German firm, and EDF Renewable Energy, the U.S. arm of a French utility.
Europe is the model when it comes to the development of offshore wind – and the development of the industry around it. The first offshore wind farm, an 11-turbine array, was installed off Denmark in 1991. By the end of 2013, 69 wind farms totaling 2,080 turbines were in operation, according to the European Wind Energy Association.
During that time, factories have been built to manufacture turbines and components. Ports, such as Bremerhaven in Germany, have been retrofitted to handle large, heavy turbine pieces. And shipbuilders have churned out specialty vessels to install them. The industry has created 58,000 jobs.
The potential for economic development is one reason Massachusetts Governor Patrick has backed Energy Management, which would use the Port of New Bedford to assemble turbines for Cape Wind and ready them for installation.
In Rhode Island, which has the highest unemployment rate in the nation, the promise of new jobs is enticing. While Governor Chafee has moved to stimulate the development of many small renewable energy projects and is also looking to Canada for cheap hydropower, he has supported Deepwater Wind.
That was shown most notably a year ago when his administration argued that proposed rules for the federal auction of leasing rights off the Rhode Island coast hadn’t given enough weight to an agreement signed between the state and Deepwater that committed the company to base its activities in the Quonset Business Park, a state-owned facility that includes a port on Narragansett Bay with easy access to the Atlantic Ocean.
The Interior Department amended its rules in response, and Deepwater Wind went on to win the two leases that were up for grabs.
For the test project off Block Island, Deepwater would not build anything at Quonset. Only assembly would take place there. French engineering giant Alstom would build Deepwater’s turbines in France and the steel jacket foundations that would support them would be built in the Gulf of Mexico at facilities used by the oil and gas industry.
If the Block Island project is successful and Deepwater moves ahead with its larger wind farm, the company says that construction would come to Quonset and manufacturing would potentially follow.
The promise that holds is significant. After securing deals to supply 240 turbines to the first offshore wind farms in France, Alstom started building two factories in that country that will employ 1,000 people.
What would it take for Alstom or Siemens, Cape Wind’s German turbine supplier, to open a factory in the United States? A study last year commissioned by the U.S. Department of Energy estimated that demand would have to reach 100 to 150 turbines a year for five years for that to happen.
“That means multiple projects on a regional basis,” said Fara Courtney, executive director of the Cambridge, Mass.-based U.S. Offshore Wind Collaborative.
Developers have always said that building a sustainable industry requires many projects, which is why they play down the importance of getting in the water first. They say there is plenty of room in the ocean for them all. A 2012 analysis by Stanford University estimated that there is enough wind off the East Coast to power a third of the nation.
But there are obvious benefits for the company that builds offshore before anyone else, namely that it would position itself ahead of competitors to develop future projects.
So who is it going to be?
Not Statoil, which dropped its plan in 2013 citing a lack of regulatory certainty in Maine.
Nor Bluewater Wind. The company secured the first agreement to sell offshore wind power to a utility in 2008, but its project off Delaware Beach failed to attract financing and fell apart in 2011.
To the consternation of many in the industry, Dominion has said it will wait until costs come down before moving forward with a full wind farm in Virginia. In the meantime, it is working on a test project.
The earlier entrants that still remain in the race – Cape Wind, Deepwater Wind and Fishermen’s Energy – have all progressed at points and stalled at others but still remain ahead of anyone else.
Deepwater Wind’s quest was initially delayed by challenges to its power purchase agreement with utility National Grid after objections were raised to its starting price of more than three times the cost of fossil fuel-generated power.
More recently, a plan to lay a transmission cable from Block Island to the mainland met with unforeseen opposition. Residents in Narragansett balked at the proposal to run the electric line through the town beach and formed a political action committee called Deepwater Resistance to oppose it. They convinced the Town Council to reject the plan, and Deepwater was forced last fall to move the landing point to state-owned Scarborough Beach.
Since then, the company’s $300-million project has gotten back on track with the agreement announced in February with Alstom and recent progress through the permitting process. The first round of hearings before the Rhode Island Coastal Resources Management Council, the lead state permitting agency, wrapped up in February.
The company says it is now on schedule to erect foundations in the fall of 2015 and install the turbines the following spring.
And Deepwater is looking ahead. Later this month, it plans to submit a bid to the Long Island Power Authority to sell power from the utility-scale wind farm planned in Rhode Island Sound, CEO Grybowski said in an interview.
Cape Wind, meanwhile, has received all of the permits it needs and has long-term contracts in place to sell most of its power. Also, Energy Management is in the midst of tying up financing for its $2.5-billion project.
But new legal challenges keep arising. The Alliance to Protect Nantucket Sound, the group financed by William Koch, in January filed suit in federal court alleging that the awarding of a power contract to Cape Wind with utility NStar discriminated against cheaper out-of-state electricity generators.
Nevertheless, the company is set to start work offshore next year, said spokesman Mark Rodgers, and, like Deepwater Wind, start operating the wind farm in 2016.
While all the attention was focused elsewhere, America’s first offshore wind turbine was quietly installed in June. The University of Maine consortium deployed a 1/8th-scale model of a floating turbine and connected it to the power grid.
But a full-scale wind farm is another matter.
At the offshore wind conference in Boston, an audience member from Europe addressed a panel that included Gordon, Grybowski and other developers.
“Over here, if it wasn’t for politics, you would be building now,” he said. “Over in Europe, if it wasn’t for politics, we wouldn’t have built so much.”
While the Obama administration has moved aggressively to back the industry in the United States, Congress has been another matter. A key tax credit has come and gone and, despite support in the Senate, it seems unlikely that it will win passage in the House this year.
Grybowski complained that New England policymakers have lately talked more about the value of hydropower from Canada than the benefits of local offshore wind.
“We’ve been fighting policy issues still,” he said. “We’ve been losing that fight.”
Gordon jumped in. The economic argument for offshore wind is better than ever, he argued, with the price of natural gas, the dominant energy source in the Northeast, hitting record highs this winter.
He was defiant about Cape Wind overcoming any obstacle in its path.
“I’m out here slinging a new product called green wind,” he said. “There are other parties that don’t want that to happen because it’s a disruptive technology.
“There are some interests that want to populate the Atlantic coast with oil and gas drilling rigs. We want to populate the Atlantic Coast with wind turbines.”
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