November 15, 2015
Massachusetts

Offshore wind’s new wave boasts deep pockets

By Mike Lawrence | Posted Nov. 13, 2015 | www.southcoasttoday.com

NEW BEDFORD – The three offshore wind companies seeking to build large-scale turbine projects on ocean waters south of Martha’s Vineyard said emphatically Friday that financing their projects wouldn’t be a problem, should the state give legislative support in a potential energy bill next spring.

“Of all the challenges that we think about…financing projects is not one of them,” said Deepwater Wind CEO Jeff Grybowski, whose company is backed by an entity of the D.E. Shaw Group, a global investment and technology development firm.

“They are a long-term builder of clean energy projects, with very deep pockets, and they’ve been funding Deepwater now for about a decade,” Grybowski said.

Deepwater Wind already is building a five-turbine, 30-megawatt pilot project off Block Island. The company holds a lease for federal waters on a much larger tract to the east, though, where Grybowski said Deepwater eventually could build up to 200 turbines over about 256 square miles of ocean.

“Our plan is to develop that project over time, in phases of a few hundred megawatts at a time,” he told The Standard-Times’ editorial board Friday.

The meeting included Grybowski and representatives of Denmark-based DONG Energy and New Jersey-based OffshoreMW, both of which also hold leases for wind turbine development on waters south of Martha’s Vineyard. The three potential competitors for future utility contracts met in one room to spread one message – a unified pitch for the state to include, in an energy bill next year, requirements that utilities purchase future offshore wind power.

“What we’re asking for is, give us a long-term horizon, state (leaders) – tell us how much you want, and let us know if we start this process, we can be certain of how much revenue we’re going to have,” Grybowski said. “Before we make that investment, we have to have security that the revenue is going to be there.”

Development of the offshore wind industry could bring jobs to the Marine Commerce Terminal in New Bedford, and economic benefits to SouthCoast. Offshore wind advocates expect steep challenges for state support, though, from backers of natural gas, solar and hydrological power, with future electricity costs a central factor.

Grybowski, DONG Energy general manager Thomas Brostrom and OffshoreMW executive vice president Erich Stephens all said advances in wind turbine technology are changing the price landscape.

“If we were sitting here having this conversation six years ago, I could not say our price would be competitive,” Grybowski said. “But this is not six years ago.”

Brostrom said DONG Energy (known locally as Bay State Wind), which operates more than a dozen wind farms in European waters, has annual revenues of $11 billion. Stephens has said OffshoreMW is backed by the Blackstone Group, which he described Friday as the largest private equity firm in the world, with “in the neighborhood of $8 billion, at any moment, ready to invest” in projects around the world.

Friday’s meeting also included New Bedford Mayor Jon Mitchell and three Democratic state legislators: Sen. Mark Montigny and Rep. Antonio F.D. Cabral of New Bedford, and Rep. Patricia Haddad of Somerset, who like Cabral is sponsoring a bill that includes so-called “carve-outs” for offshore wind.

Mitchell and the legislators have sought repeatedly in recent months to move the offshore wind conversation as far as possible from Cape Wind, the Nantucket Sound turbine proposal that ground to a halt last winter after failing to meet financing deadlines and losing utility contracts.

“The ghost of Cape Wind needs to be completely exorcised, because this is not Cape Wind – this is three of the biggest developers in the world, competing against each other in an open process,” Montigny said Thursday at the Statehouse in Boston. “This is how it should have been from the beginning.”

URL to article:  https://www.wind-watch.org/news/2015/11/15/offshore-winds-new-wave-boasts-deep-pockets/