Federal regulators approved on Wednesday a permit for the nation’s first offshore wind farm, a project located off the coast of Cape Cod, Massachusetts.

The decision for the 130-turbine farm comes after nine years of review, and is a $1 billion shot in the arm to the American offshore wind industry, which is far smaller than those in Europe and China.

The permit was awarded by Interior Secretary Ken Salazar to private venture firm Cape Wind Associates, and paves the way for utilities to power homes and businesses using electricity generated by powerful ocean breezes.

The project’s turbines would be located five miles offshore in Nantucket Sound, and cover 24 square miles.

They will be 440 feet above the water at their highest point, the blade tip.

But the project is far from completion. Several regulatory challenges remain for the project to even begin, according to a New York Times report:

The Cape Wind project has been a matter of fierce contention for years, splitting politicians and environmental groups. While some environmentalists are prepared to go to court to stop the project, other major groups, including the Sierra Club and Greenpeace, support it.

Senator Edward M. Kennedy of Massachusetts, whose family compound overlooks Nantucket Sound, had opposed the project, saying it was a giveaway to a private developer. But Mr. [Deval] Patrick, also a Democrat, has supported it.

According to that article, Ian Bowles, secretary of the Massachusetts executive office of environmental affairs, called the news “the shot heard ’round the world for American clean energy.”

Several more offshore wind farms have been proposed along the East Coast and around the Great Lakes, whose shallow floors are optimal for such projects.

The arguments for such projects:

• lean, renewable energy that means less reliance upon fossil fuels.
• Fewer greenhouse gases emitted.
• Hundreds of new construction jobs.

UPDATE:National Grid Given Approval To Buy Half Of Cape Wind Power

NEW YORK (Dow Jones)–The Massachusetts utility regulator approved the sale of half of the power generated by a long-planned wind farm off Cape Cod to National Grid PLC (NGG) Monday.

The Massachusetts Department of Public Utilities approval is the latest milestone for what’s expected to be the nation’s first offshore wind project, allowing National Grid to buy the power under a 15-year contract at a price that’s about double current market prices.

Regulators, however, denied the company’s petition to approve a second power-purchase agreement for the remaining output from the project, known as Cape Wind, because it did not specify a buyer.

Cape Wind, a 130-turbine project that will span 25 square miles of the Nantucket Sound, is expected to begin construction next year, after more than nine years of planning. The controversial project has faced opposition on a range of issues from the cost to consumers to the impact on water views and local fishing grounds.

National Grid, an electric delivery utility in Massachusetts, expects the purchase of Cape Wind’s output to raise consumers’ bills by 1% to 2%.

The agreement with National Grid will facilitate the developments of renewable energy generation to meet state regulations and “does so with strong protections for ratepayers,” Ann Berwick, chair of the state’s utility agency, said in a statement. Cape Wind also offers benefits not available from any other renewable source and these benefits “outweigh the costs of the project,” she said.

Cape Wind president Jim Gordon said the “long-term contract not only secures an abundant, inexhaustible clean energy resource but protects consumers from rising fossil fuel and environmental compliance costs.” The developer is pursuing multiple options to sell the remaining power not contracted to the electricity transmission company.

Purchasing half of the offshore wind project’s generation will help National Grid fulfill “a good piece” of the renewable portfolio requirement, said Tom King, president of National Grid’s U.S. division, in an interview. Massachusetts requires that about 3.5% of the state’s power be generated from alternative sources.

King isn’t surprised another party has not stepped up as a counterparty for the second contract that was rejected because “it probably makes sense for them to watch us go through the proceedings.” The second contract was seen as a way to make it easier to find a buyer for the remaining power and secure economics for the project.

The contract between National Grid and Cape Wind, detailed in a 374-page order, sets the initial price for power at 18.7 cents per kilowatt hour in 2013. That will rise by 3.5% a year over for the life of the agreement.

Under the current contract, power costs are more than double the rate state residents currently pay. Electricity prices in the Northeast market are among the highest in the country, even though prices have fallen with the sharp drop in natural gas prices in the last two years.

King said the price is justified because it reflects not only the price of power, but the cost of transmission and renewable attributes for the new capacity. National Grid will have the right to extend the contract for another 10 years. The new contract could see power prices set below market rates, the state agency said.

In voicing opposition to the National Grid contract, the Alliance to Protect Nantucket Sound estimated that ratepayers could be forced to cover $4 billion in costs from Cape Wind if the remaining half of the power is sold at a similar price. The organization cited other New England projects that bring renewable hydro and wind power at lower costs to consumers.

The Massachusetts utility regulator expects the new wind generation to moderate peak electricity prices in the region and add 162 jobs over the life of the contract. The agency said the price for Cape Wind power can go up if the developer is unable to tap into federal subsidies, but prices would fall if financing costs were reduced.

National Grid shares closed up 0.5%, at $46.84, Monday. The stock is down 14% this year.

-Naureen S. Malik, Dow Jones Newswires; 212-416-4210; naureen.malik@dowjones.com

U.S. offshore winds, abundant off the coasts of 26 states, have the potential to generate four times as much power as the nation’s present electric capacity, a new Department of Energy report says.

Developing this resource would help the United States reduce air pollution, achieve 20% of its electricity (or about 54 gigawatts) from wind by 2030 and create more than 43,000 permanent, well-paid technical jobs, according to the 240-page study by DOE’s National Renewable Energy Laboratory.

The United Kingdom leads worldwide in the amount of power it has generated from offshore wind projects from 1991 to 2010, followed by Denmark, according to a new U.S. Department of Energy study.

“Clean, renewable energy development that capitalizes on the nation’s vast offshore wind and water resources holds great promise for our clean energy future and our economy,” Energy Secretary Steven Chu said in releasing the findings.

The United States leads the world in installed, land-based wind energy capacity, but it has no offshore wind farms yet, the report says. About 20 projects, such as the one off Cape Code, Mass., are in the planning and permitting process, most of them in the Northeast or Mid-Atlantic regions. Other projects are being considered along the Great Lakes, the Gulf of Mexico and the Pacific Coast.

“Overall, the opportunities for offshore wind are abundant, yet the barriers and challenges are also significant,” the report says, advocating for policies and research to facilitate these projects. In contrast, the report says, Europe has held the lead in offshore wind since Denmark’s first project in 1991, having installed more than 830 turbines with grid connections to nine European countries.

Britain opens world’s largest offshore wind farm

by Agence France-Presse

U.S. wind developers see prices easing

By Scott Malone

BOSTON (Reuters) – Two companies aiming to build wind farms off the U.S. northeast coast expect the cost of electricity generated from sea-based turbines to fall as the industry grows.

No offshore wind farms have yet been built anywhere along U.S. coasts, and the rates that Deepwater Wind and Cape Wind have proposed charging consumers for the electricity they would generate are much higher than the public had expected.

Those rates — about three times higher than the prevailing cost of electricity in New England over the past five years — reflect the poor economies of scale of a nascent technology and are also inflated with renewable energy tax credits that utilities would be able to resell, executives told the Reuters Global Climate and Alternative Energy Summit in Boston.

They argued that wind farm operators, who have high capital expenses but no fuel costs, would help to push down electricity prices across the region over time.

“Prices are coming down,” said Bill Moore, the chief executive officer of Deepwater Wind, which plans to build a small installation of five to eight turbines off Block Island, as well as larger projects further off Rhode Island and off New Jersey.

“If you look back over the 20 years that commercial wind has been built onshore, over that time we saw declines in pricing that were on the order of 60 to 80 percent and I think over a similar period we’ll probably see declines in our pricing of a similar amount,” Moore said. “It just has to do with scaling up the industry.”

The developer of Cape Wind, a 130-turbine installation planned for Nantucket Sound off Massachusetts’ Cape Cod beach area, had a similar prediction.

“With the learning curve, with developing the port infrastructure, developing the manufacturing supply chain, getting engineering, procurement and construction contractors more familiar with the execution and risks of building these things, over time the cost of these types of projects will drop, just as what happened in the land-based business,” said Jim Gordon, Cape Wind’s CEO.

Deepwater, which is backed by hedge fund D.E. Shaw, plans to sell electricity to utility National Grid (NG.L: Quote, Profile, Research, Stock Buzz) at a rate of up to 24.4 cents per kilowatt hour. That is higher than the 18.7 cents per kilowatt hour rate the larger Cape Wind project has agreed, also with National Grid.

“Block Island is an expensive project. It has some obvious dis-economies of scale,” Deepwater’s Moore said. “We knew that going in, but it still serves a useful purpose.”

The upside to starting with a small-scale wind farm is that it will be cheaper to build, Moore said. The developers expect the installation to cost $205 million and plan to seek $150 million in construction loans to fund it.

That’s far lower than the tab of more than $1 billion it will likely take for Deepwater’s other proposed projects, installing about 100 turbines off the coasts of Rhode Island and New Jersey.

“We’re looking at pricing that is, for these larger projects that we’ll be submitting to various power competitions this fall, maybe as much as one-third lower than the Block Island price,” Moore said.

Deepwater Wind plans to build its larger installations about 15 miles off the coast, a costly decision but one that will make them all but invisible from the coast — and head off one of the major complaints raised about Cape Wind.

PRICE SUPPRESSION

Both projects will also push power electricity prices down across the region through a process called price suppression.

Electric grid operators meet demand by buying power from a range of producers, from operators of coal and gas-fired plants to wind farms, which have a range of prices. Grid operators then meet demand — which varies with temperature and time of day — by bundling the offers of the lowest-priced power producers. All of the accepted bids are paid at the price quoted by the most expensive of the accepted bids.

Wind farms, which have minimal operating costs once their facilities are built, undercut the traditional electric producers in this process by offering a bid price of zero.

“Every hour that Cape Wind operates, it will displace a higher cost, more heavily polluting power facility,” said Cape Wind’s Gordon. “If we bring in 300 or 400 megawatts of Cape Wind’s power, we can help knock off 300 or 400 megawatts of the highest priced unit.”

Four hundred megawatts of electricity is enough to meet the needs of 3.2 million typical American homes.

As demand in the United States rebounds from its recessionary level and the rapidly growing economies of India and China demand ever more energy, prices of traditional fossil fuels including coal, natural gas and oil will likely march upward over the coming decades, making their initial rates seem more competitive the executives said.

Cape Wind, which plans to use Siemens AG (SIEGn.DE: Quote, Profile, Research, Stock Buzz) turbines, and Deepwater, which has not yet chosen its suppliers, are two of more than a dozen proposed offshore wind farms that aim to be the first in the United States.

(Reporting by Scott Malone; Editing by Derek Caney, Gary Hill)

David R. Baker, Chronicle Staff Writer

Floating Offshore Wind Farms

Someday decades from now, California’s sprawling coastal cities could draw their power from floating windmills that bob on the sea like buoys, far from shore.

Their blades would spin over deep ocean water, turning in winds that are steadier and stronger than they are on land. Undersea cables would send their electricity to shore.

This kind of floating windmill has not yet been deployed en masse. But a model of one sits in the Berkeley office of Principle Power, one of several companies trying to tap the powerful winds at sea.

Principle has signed agreements with utilities to test its device, called the WindFloat, off the coasts of Oregon and Portugal. Three connected canisters filled with ballast water will support a wind turbine, with cables mooring the entire device to the seabed.

“The most prolific minds in the renewable energy business are talking about taking land-based wind and dragging that power out to the coast, which really doesn’t make much sense,” said Jon Bonanno, the company’s president. “It makes much more sense to generate that power from deepwater sources and transmit it to the coast.”

Used in Europe
While the idea may be simple, executing it isn’t.

Offshore wind farms have been used for years in Europe. But those windmills sit in shallow water, their bases bolted into the ocean floor. Wind farms proposed for the U.S. East Coast, including the contentious Cape Wind project off Massachusetts, take the same approach.

But the seabed off most of California’s coast drops quickly, close to shore. Standard ocean wind farms would have to be built near the state’s beaches, plainly visible from land. And they wouldn’t be able to cover much space, confined to a narrow band of water.

Oil companies have long used floating platforms to drill into the seabed far from shore. But those platforms tend to be wide and heavy, and they aren’t designed to catch the wind. A windmill floating on a small platform will have to endure heavy gusts without tipping.

Big rewards
The potential rewards are huge. The National Renewable Energy Laboratory estimates that the wind blowing across California’s deep water could generate as much as 130 gigawatts of electricity. That’s roughly twice as much electricity as the state needs on a hot summer afternoon.

Principle Power, based in Seattle, last fall signed an agreement with the Tillamook People’s Utility District in Oregon to install the WindFloat off the coast of central Oregon as early as 2012. The project will start with a single WindFloat, capable of generating a maximum of 5 megawatts of electricity when running at full tilt. Megawatts measure the amount of electricity generated in any given instant, and one megawatt is enough electricity for 750 homes.

If all works as planned, the WindFloat project will expand into an entire offshore wind farm, covering 12 to 15 square miles and capable of generating 150 to 200 megawatts.

Concerns over birds
The WindFloat design is stable enough to withstand the fierce winter storms that pound Oregon’s coast, said Alla Weinstein, Principle Power’s chief executive officer.

Environmentalists, however, want to ensure that offshore wind projects don’t prove as deadly to birds as onshore wind farms have. Gary Langham, director of bird conservation for Audubon California, wants offshore wind developers to steer clear of island or coastal nesting grounds. In addition, the ocean surface off California has places where birds congregate to eat, mostly where upwellings of water from far below bring up their favorite types of food.

“You can get a hundred thousand seabirds in a big patch at once,” Langham said. “So the more we can do to avoid those hot spots, the better we’ll avoid impacts.”

E-mail David R. Baker at dbaker@sfchronicle.com.

Courtesy of WICKED LOCAL

Nauset High moves ahead with wind turbine plan

By Debi Boucher Stetson
Tue May 19, 2009, 06:00 AM EDT

EASTHAM – Nauset Regional High School is closing in on its goal of raising $45,000 to match a $400,000 grant from the Massachusetts Technology Collaborative to design and construct a wind turbine on the school campus.

School officials envision saving close to $200,000 a year by having the school generate its own electricity, plus make money from the sale of excess electricity.

High school Principal Tom Conrad told the regional school committee last week that funds raised to date totaled “close to $30,000.”

Conrad said later that the turbine would probably be sited right behind the tennis courts “because that’s the farthest spot from our neighbors. We want to be sensitive,” he added.

Wind Turbines Eastham MA

Wind Turbines Eastham MA – Nauset Regional High School

Wind turbines have proved controversial in Eastham, where town meeting voters recently passed a new wind power bylaw after considerable debate and revisions. The bylaw allows 75-foot turbines throughout town, 100-foot turbines in the industrial zone on Holmes Road in North Eastham and 250-foot municipal turbines on the 125-acre town-owned parcel between Cable Road, Nauset Road and Ocean View Drive, the road that stretches between two Cape Cod National Seashore beaches. The high school is across the street from the Cable Road portion of the property.

“We had been talking about 343 [feet high],” Conrad told the school committee during a brief discussion on Eastham’s bylaw. “The higher up you go, the better the wind.” He noted that the wind tower at Massachusetts Maritime Academy in Bourne is 243 feet high. Conrad said he has been in touch with an official at Mass Maritime about sharing information regarding the success of their turbine. “They have been going for 18 months, and they have great data for us,” he said.

He said the school district is currently negotiating a contract with Boreal Renewable Energy Development to do a feasibility study and design the turbine. “We want to get on the fast lane for this – these are competitive grants, and we have been warned that if we delay we could lose the grant,” he said.

For that reason, the school is working hard to raise the matching funds. Gretel Norgeot, a parent who has spearheaded the fund-raising effort, said a letter to parents explaining the wind turbine project and appealing for donations will be sent home with high school students soon. (The letter has been approved by Nauset Regional School Committee.)

Norgeot said any size donation is welcome. “We have received many $25 donations and they all add up,” she said. She added that organizers would prefer many small donations to seeking out large donations, because receiving a large number of donations would demonstrate broad community support. “That’s what it’s all about, community,” she said. “We thought it was really important to get everybody involved.”

Fred Fenlon, Eastham’s representative on Cape Light Compact and a former member of the town’s alternative energy committee, has been working with Conrad on the turbine project and said he believes it will “absolutely” go forward. He noted that technically, the school does not need to comply with the town’s bylaws because the high school’s land was donated by Cape Cod National Seashore. “So it’s not really part of Eastham.”

Conrad indicated the school would try to work with the town’s bylaw. “The town has taken a new stand in terms of height, and we’re going to be looking at that to see what that means for us,” he said.

The wind turbine, he said, will be used as an educational tool in a number of different ways, starting with getting students involved in interpreting data from the feasibility study. “Next year we’ll offer a renewable energy course and with that will be wind turbines. From there I see it being integrated into all the subject areas – for instance, math.”

Fenlon said the educational aspect of a high school wind turbine is especially important today, because wind energy is an emerging field. “There are going to be people needed, and they have to be educated and trained, and hopefully they’ll be from the Cape,” he said, “and hopefully they’ll stay here, and raise families.”