Offshore Wind Wire

By Peter Brennan

Days after receiving federal approval, the Cape Wind offshore wind project cleared another major hurdle by agreeing to a power purchase agreement with local utility National Grid.

The agreement, submitted to the Massachusetts Department of Public Utilities today, calls for National Grid to pay 20.7 cents per kilowatt/hour for 50 percent of Cape Wind’s output.  Production is scheduled to begin in 2012 and that price is set to increase 3.5 percent every year during the course of the 15 year contract.  The wind farm’s output includes electricity and renewable energy certificates.

National Grid officials said this deal will result in an average monthly increase of $1.59 for its customers.  The deal must be approved by the state DPU.  In March, the Rhode Island Public Utilities Commission rejected an agreement for National Grid to buy electricity from Deepwater Wind’s Block Island project for 24.4 cents per kilowatt/hour.

The proposed 130-turbine wind farm near Cape Cod in Massachusetts had languished in the permitting process for more than nine years until last month, when Interior Secretary Ken Salazar approved the project.  Local tribes have said they will file lawsuits to block the project but most analysts now see the development as inevitable.

Cape Wind President Jim Gordon applauded National Grid for reaching the deal.

“National Grid’s decision to move forward with this agreement helps put Massachusetts at the forefront of this emerging industry and provides their customers with secure and stable-priced renewable energy,” Gordon said.

National Grid President Tom King sought to minimize the increased consumer costs associated with the project.

“We recognize that all renewable energy, be it on- or off-shore wind, solar or other sources, has a cost associated with it,” King said. “Carbon-based generation comes with its own set of long-term costs – to our health and our environment.  Cape Wind is an investment in our future, and one that we must support if we are to achieve a lower-carbon energy portfolio.”