Offshore Wind Wire

BOSTON — Cape Wind and utility operator National Grid agreed to enter into talks on a long-term power purchase agreement, Massachusetts Gov. Deval Patrick announced Wednesday.  An agreement to purchase the electricity generated by the proposed 130-turbine project is a major hurdle in attracting investors to a project that is expected to exceed $1 billion.

Patrick touted the negotiations as an important step for Massachusetts to meet its renewable energy goals.

“For both reducing greenhouse gas emissions and launching the offshore wind industry that will achieve those reductions, it is essential for Cape Wind, like offshore wind in general, to move from wishful thinking to reality,” Patrick said. “A contract with an electric distribution utility like National Grid will move Cape Wind one step closer to reality.”

According to the Governor’s office, National Grid will soon submit a Memorandum of Understanding signed by Cape Wind, the utility and the state Department of Energy Resources.  The memorandum will describe the methods and timeline for the negotiations.  The state Department of Public Utilities must approve the memorandum and would have to approve any purchase power agreement entered into by the parties.

Barbara Hill, executive director of Cape Wind advocacy group Clean Power Now, said she expects the details of the power purchase agreement to be finalized in the next 60 days.

In 2008, Patrick signed the Green Communities Act, which requires utilities to enter into long-term contracts with renewable energy producers.  A successfully negotiated agreement, however, will mark an important step forward for offshore wind energy, according to Massachusetts Energy and Environmental Affairs Secretary Ian Bowles.

“While these contracts can be arrived at in a variety of ways, a smart, well-structured agreement to purchase the power generated by the nation’s first offshore wind farm … will promote renewable energy,” Bowles said.

Rhode Island’s plans for an offshore wind farm recently hit a snag during the negotiation process when National Grid was unable to come to a pricing agreement with project developer Deepwater Wind LLC.

On Wednesday, National Grid President Tom King made clear the utility’s bottom line.

“We are optimistic that we will successfully negotiate a long-term power contract with Cape Wind,” King said.  “National Grid recognizes that as a public utility, we need to facilitate these important renewable projects while maintaining a focus on minimizing the cost to our customers.”

State officials are anxious for Cape Wind to progress as quickly as possible as the project may be eligible for federal incentives if it can meet deadlines imposed by the American Recovery and Reinvestment Act.