Published on October 10th, 2010 | by Susan Kraemer8
Cape Wind Project Now Has its Ocean Lease From the US Govt
You might have thought the long battle for the Cape Wind project was over back in April, when the Obama administration BLM filed its approval of the project, but there’s more steps than that!
Thursday, Secretary of the Interior Salazar surprised the AWEA at an annual meeting by announcing that at the conclusion of the event he would be publicly signing his approval of a 28-year Federal lease with Cape Wind Associates for 25 square miles of ocean floor 16 miles from Nantucket off the coast of Massachusetts where the project is to be built.
The first ever off-shore wind project in this country would involve 130 wind turbines 16 miles off the coast that could produce up to 468 megawatts of electricity and sell power at $0.18 cents per kilowatt-hour, more than any other non-fossil power other than nuclear energy.
The most controversial renewable energy project in the US would raise National Grid customers in Massachusetts home electric bills per month $1.50. Electricity rates for its commercial and industrial customers would increase between about 2%: well under the 5-7% annual rate rise seen among electricity bills nationwide.
On-shore wind is much cheaper, since off-shore wind is nonexistent, something that Salazar attempted to correct in forming the Atlantic Offshore Wind Energy Consortium earlier this year with 5 Atlantic state governors, to fast track this nation’s stalled off-shore energy industry.
The consortium has worked on eliminating the barriers to off-shore wind development, by identifying the best offshore potential for wind projects, bringing the environmental review in line with reality and speeding up the permitting process by removing redundant layers of bureaucracy.
The Atlantic seaboard has a power potential of 330 Gigawatts, about twice the total electricity needs of the states involved. The consortium has doubled to include the governors from 11 Atlantic states.
“I am determined to accomplish a similar objective of orderly, responsible, and straightforward permitting for wind development on the Atlantic Outer Continental Shelf” Secretary of the Interior Salazar told the AWEA during his surprise announcement.
“The Atlantic OCS is receiving significant – and increasing – interest from communities frustrated by rising energy costs, states seeking to meet renewable energy mandates, and companies looking to advance their respective turbine and transmission technologies.”
“But as with any new frontier, there needs to be a clear, common-sense, and fair process for exploration and development. Until we started laying the rules of the road for offshore wind development a year and a half ago, no such process existed” he added. “That’s why it took the Cape Wind project eight years to clear necessary reviews.”
As with the solar projects now planned on BLM lands, the 28-year lease signed by Salazar will cost the company rents and fees payable to the federal government. The “ocean” rent is $88,278 in annual rent prior to production, and then once production begins, a 2% fee for fifteen years and from then: 7%. The first off-shore wind power is expensive at $0.18 cents a kilowatt-hour.
On-shore wind companies who can sell power for half that amount are understandably upset. TransCanada Energy, with on-shore turbines in Maine, offered to sell electricity to National Grid for less than $0.11 cents per kilowatt-hour. And that’s just the objections on that side. The US Department of Justice is still battling four pending lawsuits in federal court by the NIMBY contingent.
With the project approval in April, and now the rent agreement signed with the US government, the next step is that the company will need to finalize a power purchase agreement with National Grid, the utility that will make history by purchasing the first off-shore wind power to ever be generated in the USA.