In the depths of the Great Recession, a large chunk of the federal stimulus package was allocated for renewable energy projects. One of the boldest was Cape Wind, a $2.6-billion wind farm that aimed to install 130 mammoth turbines in the waters of Nantucket Sound off the coast of Massachusetts.
Announced with great fanfare by state and federal officials in 2010, Cape Wind was set to be the first offshore wind farm in U.S. waters, generating an estimated 360-million megawatts of clean energy at full capacity. Two major utilities–NSTAR and National Grid–agreed to purchase 80 percent of the electricity produced by Cape Wind’s turbines. The U.S. Department of Energy earmarked $130 million in stimulus funding to jump-start the project; the Interior Department fast-tracked approvals.
That was then, this is now: Cape Wind is dead in the water and most likely will not be built, at least not in this decade.
In order to qualify for federal tax credits that would have covered a major portion of the project’s capital costs, the backers of Cape Wind needed to get construction started on the offshore mega-project by the end of 2014. A $200-million private investment in Cape Wind also was tied to the developers securing full financing for the project by the end of last year.
Cape Wind missed the Dec. 31 deadlines. In January, the state terminated its contracts with NSTAR and National Grid, effectively killing the project.
As late as last fall, it still appeared that Cape Wind had–forgive us–the wind at its back. U.S. Energy Sec. Ernest Moniz heralded the project as “the beginning of a strong U.S. offshore wind industry.” Construction was started on a state-funded, $113-million marine terminal in New Bedford that was supposed to facilitate the shipment of turbines to the Cape Wind site in Nantucket Sound.
But the failure to secure federal tax credits, the withdrawal of private investment and the termination of utility contracts were followed last month by what looks like the final nail in the project’s coffin: a decision by the Massachusetts Clean Energy Center (MassCEC), a quasi-governmental agency, to terminate its $4.5-million, two-year contract with Cape Wind to rent the 28-acre New Bedford terminal as a construction staging area for the big wind project. MassCEC says it’s received three competing bids for the facility, which is still under construction and reportedly $10 million over budget. The agency will pick a winner later this summer.
Even before it was announced in 2010, Cape Wind faced stiff opposition from some well-heeled Cape Cod stalwarts who didn’t want large windmills ruining the view from their boat decks and beachfront compounds, including the late Sen. Ted Kennedy and billionaire William Koch. An environmental group calling itself the Alliance to Protect Nantucket Sound complained that the 440-foot-high Siemens turbines planned for Cape Wind would be visible from the shore, “look like LaGuardia airport at night,” create a navigational hazard for boats and scare away the handful of cod that are left off the coast of Massachusetts after decades of overfishing.
Presumably, the environmental activists also were studying whether offshore wind turbines could influence the flight path of baseballs heading for the Green Monster in Fenway Park. [OK, we made up that last bit.]
Much as we’d like to blame rich guys, misguided tree-huggers and bungling bureaucrats for the demise of Cape Wind, it seems likely that the ambitious effort to build the first offshore wind farm fell victim to a competing player in the ongoing U.S. Energy Revolution.
According to the U.S. Energy Information Administration, the “levelized cost of electricity” from offshore wind power currently is more than three times the cost of electricity from natural gas, about $204 to $66 per-kilowatt hour, respectively. [Levelized cost is defined by the EIA as “the per-kilowatt hour cost in real dollars of building and operating a generating plant over an assumed financial life and duty cycle.”]
In other words, economically speaking, what seemed in 2010 like a viable initiative (offshore wind power) has in the five years that followed gotten the wind knocked out it (sorry, couldn’t resist) by fracking.
But we suspect that’s not the end of the Cape Wind story, folks.
The “levelized cost” to the human race of climate change soon will become apparent to all of us. When the “assumed life and duty cycle” of our species is threatened, the short-term calculations of carbon-based markets will lose their relevance faster than an ice cube evaporates in the Mojave Desert. Survival is the most powerful instinct embedded in the tangled threads of our DNA. Hopefully, we have a few more strands of it than the dinosaurs.
Most of the population of the United States is concentrated on our coasts; offshore wind is an abundant power source, within easy reach of our existing transmission grids. All we need to do is set up the turbines and hook them up. It would be an ironic epitaph indeed if, at the moment of truth (climate-wise), the only offshore facilities we considered a priority were oil rigs.
What seems like a whisper on the wind today will confront us like a Category 5 hurricane tomorrow. We’ll either harness that wind and ride it to higher ground or get blown into the raging sea of the global calamity we’ve created.
Are economic development incentives a form of corporate welfare?