Interior Secretary Pushes to Complete Cape Wind Project

WASHINGTON (Dow Jones)--The Obama administration is pushing for a "common sense" resolution by March 1 to a battle over Cape Wind, the wind project off the coast of Cape Cod, Mass., that local landowners have spent years fighting.

Interior Secretary Ken Salazar said Monday that he plans to convene a meeting next week in an attempt to broker a deal that can satisfy all sides in the dispute. He said in a statement that if an agreement cannot be reached by March 1, "I will be prepared to take the steps necessary to bring the permit process to conclusion."

The announcement came after the National Park Service said that Nantucket Sound is eligible for listing in the National Register of Historic Places, a designation that could complicate commercial development. The U.S. government cited the body of water's historic and cultural significance, especially to the Wampanoag tribes, which believe that their ancestors lived on land now submerged beneath the water.

Cape Wind, which could be the country's first-ever offshore wind farm, is to consist of 130 wind turbines to be set up in 25 square miles of the sound, just off Cape Cod, Nantucket Island, and Martha's Vinyard. The controversial project has won state and local approvals, but those are being challenged in state court as local residents have raised numerous objections. The project's developer is privately held Energy Management Inc., founded by energy developer Jim Gordon.

The bolded sentence is a pretty strong political statement by the administration.

United States: Momentum Continues For Offshore Wind

The NYPA has released an RFP for the development of offshore wind power projects in the New York State waters of Lake Erie and/or Lake Ontario. Final proposals are due June 1, 2010.

On December 1, 2009, the New York Power Authority (NYPA) released a request for proposals (RFP) for the development of offshore wind power projects in the New York State waters of Lake Erie and/or Lake Ontario.

The NYPA is soliciting proposals for the development of a utility scale, offshore wind power project totaling approximately 120-500 megawatts. The project would interconnect with new or existing transmission facilities of the NYPA, National Grid, New York State Electric & Gas and Rochester Gas and Electric, which are all controlled by the New York Independent System Operator. The NYPA would purchase the full output of the wind power project under a long-term power purchase agreement (PPA).

A PPA ensures stable long term revenues, the key condition to investment in the sector.


In the long run, we're all dead. John Maynard Keynes

J noted Vestas choose the French port of Dunkirk as base of operations for building the 300MW Thanet windpark in the Thames Estuary.  Indeed, a crucial decision, and a loss of UK jobs (gain for France.)

Here's a long-winded explanation from the Vestas PR J flagged.

Vestas pulled the V90 back from new sales in the offshore market after initial negotiations began with Warwick. After a year of engineering work and testing on a new internal component, Vestas made the V90 available for offshore again in May 2008.

"On the sales side, we had applied the brakes to a full stop," says Anders Søe-Jensen, President of Vestas Offshore. "For a new organization that was watching a market blooming around us, it was a painstaking affair." Vestas Offshore used the time well, however, he adds. "We had been growing at tremendous speed. This gave us time to look at the way we were organized and improve that."

More importantly, he says, Vestas designed an improved, methodical way to test products before they are released at its new test centre in Denmark. "We have some of the world's most advanced test facilities, where our turbines and components are very thoroughly tested before release. This goes for onshore as well as offshore," says Anders Søe-Jensen. "Our new test facility helps to ensure that the Vestas product quality remains best in class."

He adds, "Offshore, the lesson is: you have to be bold, but very cautious. Never put a prototype offshore. We also learned that you need knowledgeable guys offshore. Experience is everything out there - that's what makes a difference."

a £100bn programme to build thousands of offshore wind turbines that could power most of Britain's households during strong winds

What are we speaking of, that is in terms of MW-s of generating capacity and TWh-s of expected annual generated electricity?

If we are here: can anyone dig up figures on total wind power generation (TWh) in the UK in 2009?

_{*Lunatic*, n.
One whose delusions are out of fashion.}

I think the financing will come from different players for different stages of the wind farm "life cycle", notably the construction phase and the operation phase which are very capital intensive as money is needed to build the farms and then money to buy the finished project. The developement phase is not that capital intensive, however, it needs very specific know how which is currently still lacking in sufficient quantity and quality to realise so many large projects as the 3rd round projects - a problem which IMHO is currently very much underestimated...

Regarding the financing, my best bet is that the operation phase (coupled with strong service agreements from either manufacturers or perhaps exeperienced operators like those big utilities who already operate offshore wind farms) will be financed by life insurance / pension companies either directly or through project bonds (perhaps as a protfolio of farms).

The construction phase will either by "classically" project finaced (as Jérômes projects) or financed by the utilites with put-option like agreements to sell the projects off to other investores (above mentioned life insureres etc....) so that the utilites balance sheets only need to be used for relatively short periods to be freed up again for the next project. Perhaps a couple of utilites will spin off their renewable energy divisions and have IPOs as the risk profile of offshore wind farm construction is different than "normal" utility stuff... A wholly other scenario would be for EPC contractors to actually take the risks using the "life insurance company put-option" either directly (if they have a big enough balance sheet to do that on a big scale (unlikely) or using bank finance to bridge until operation (effectively giving the banks the risks again, just like in a classical project financing, with the only difference being that it doesnt need to be long term funded thanks to the life insurance put).