Offshore oil and gas industry contractors have been having a hard time of it since BP’s Deepwater Horizon tragedy, but they’re very likely to see a turnaround in their fortunes if the drive to develop US offshore wind resources continues to build momentum. Cape Wind– developer of the largest offshore US wind power project development proposed to date, as well as the most hotly contested– today announced that it’s selected the joint venture team of Cal Dive International, Cashman Equipment Corp and Flatiron Construction to build America’s first offshore wind farm in Nantucket Sound.
The announcement is the second piece of good news regarding the massive 130-turbine, 468 MW Cape Wind project to come out recently. On March 30, Massachusetts utility NStar filed a Power Purchase Agreement (PPA) with the Massachusetts Dept. of Public Utilities (DPU) to purchase 27% of the clean, renewable offshore wind energy produced by Cape Wind.
Commenting on the PPA filing, Cape Wind president Jim Gordon stated, “Today’s filing of the Cape Wind/NStar Power Purchase Agreement is about moving forward to deliver energy, environmental and economic benefits to Massachusetts and New England electric consumers. “By harnessing our abundant and inexhaustible offshore wind resources, Massachusetts will be at the forefront of a new industry creating a better and more secure energy future.”
National Grid and Cape Wind previously concluded a PPA, already approved by the DPU, for the purchase of 50% of Cape Wind’s output. That leaves a bit less than 1/4 of the Cape Wind offshore wind farm’s planned capacity still unsold.
The Many Challenges Facing a Historic US Clean Energy Project
Cape Wind project construction is slated to begin in 2013, though design work will begin this summer. Seeing the offshore wind farm project through to fruition poses first-of-their-kind challenges to the US marine engineering and construction consortium forming around the project, as well as for the US wind energy and electric power industries. The experience marine engineering and construction industry players, including the three Cape Wind contractors, have developed and honed in building, operating and maintaining offshore oil and gas drilling platforms is sure to serve them in good stead.
Boston-based Cashman Equipment has a long history of building marine projects off the Massachusetts coast. The opportunity for locals to work on a historic US offshore and renewable energy project adds to the project’s benefits and attractiveness. “It’s a perfect fit for what we do,” company president Jamie Cashman said. “I am thrilled that our Massachusetts company will be helping to make Cape Wind happen.”
Founded in 1947, Colorado’s Flatiron Construction is one of the leading civil engineering and construction firms in the US. “We are excited to build Cape Wind, this project is moving forward and there is no better way for us to enter the US offshore wind market than to help build the first commercial project,” said Rik van den Berg, Flatiron Construction Corp. project manager.
Houston’s Cal Dive International brings a wealth of offshore oil and gas platform and marine construction experience to the joint venture Cape Wind contractors’ group, having accumulated some 35 years of experience in the field, including successfully completing multiple projects in the US Northeast. “We are excited about the opportunity to expand our business into the offshore wind sector,” Cal Dive International, Inc. General Manager, Construction Russell Vandiver said.
Moving Forward in the Face of Staunch Opposition
Opponents remain staunchly committed to stopping the Cape Wind project. They’ve said it will ruin the views and marine ecosystems from Nantucket Island and coastal Massachusetts. They’ve claimed that the PPA prices NStar and National Grid have agreed to pay are way too high. These assertions have been rebuffed and countered by Cape Wind, project partners, supporters and independent economic and environmental studies of offshore wind power projects.
Electricity from the Cape Wind will cost the average residential customer on Cape Cod and Martha’s Vineyard a whopping $1.44 per month extra in the first year of the 15-year NStar contract, according to the documents filed by the utility. NStar is to purchase Cape Wind’s clean, renewable electricity for 18.7 cents per kilowatt-hour (kWh) in the project’s first year, with the price increasing 3.5% each year therefafter. NStar will collect an additional 4% of the contract’s value as per Massachusetts’ 2008 Green Communities Act.
Moreover, a recent study published by economic consulting firm Charles River Associates found that the clean, renewable offshore wind power produced by Cape Wind will reduce wholesale electricity prices in the New England region by $7.2 billion over 25 years, thanks in no small part to the fact that the marginal cost of electricity produced from the offshore wind farm will come a marginal cost of zero once construction is completed.
Though not enough time has passed to comprehensively assess the impact of offshore wind farms on marine ecosystems and other public use, the evidence coming in contradicts opponents’ claims that they will harm the environment. As to the aesthetic value of the views of the seascape, “I think it’s going to be very hard-pressed for anybody to see those things from land,” Cashman stated.
Critics nonetheless continue to actively oppose further progress. “Cape Wind has no authority to build,” Audra Parker, president and CEO of the Alliance to Protect Nantucket Sound, was quoted as saying in a Cape Cod Times report.
“There is no valid determination from the FAA, they haven’t even begun their preconstruction survey work, they have no financing, they haven’t sold a quarter of their power, they’ve got 10-plus parties filing federal lawsuits in court, and these are more tactics to convince the public that they’re ready to go when in fact they will never be built.”
No hype: either way it turns out Cape Wind will be a historic moment with respect to US marine, offshore energy and renewable energy. Stay tuned.
I've been reporting and writing on a wide range of topics at the nexus of economics, technology, ecology/environment and society for some five years now. Whether in Asia-Pacific, Europe, the Americas, Africa or the Middle East, issues related to these broad topical areas pose tremendous opportunities, as well as challenges, and define the quality of our lives, as well as our relationship to the natural environment.