Offshore Wind: After building it, one city wonders if they will come

NEW BEDFORD, Mass. — The ocean has been good to New Bedford.

This coastal Massachusetts city was once one of the richest in the world thanks to a booming whaling industry, serving as a home base for mariners searching for fortunes in whale oil.

That was in the 1850s, when in his novel “Moby-Dick,” Herman Melville described the city with its “opulent” homes and gardens as “the dearest place to live in all New England.”

It’s not like that anymore.

The city of 100,000 has been in decline ever since whaling’s demise. Manufacturing initially replaced whaling as the top industry, but those jobs have since been outsourced, leaving behind a dozen abandoned mills sitting on useless, contaminated land. Now New Bedford’s economy is led by its commercial fishing fleet, which is more often than not in port thanks to federal quotas. Today, the former homes of whaling captains sit dilapidated, divvied up as multifamily rentals.

New Bedford is in need of a renaissance. To bring it, officials are looking to the sea once again in an attempt to reinvent the city as a hub of the offshore wind industry.

It’s a risky strategy.

With no active offshore wind farms in the United States, the industry is in its infancy. And Cape Wind, which is set to be the city’s first offshore wind customer, has been dealt blow after blow this month with the loss of two power purchase agreements and a suspension from participating in New England’s wholesale energy markets. The prospect of other projects getting steel in water anytime soon also seems more unlikely this year with the expiration of federal renewable energy tax credits.

But Massachusetts has spent $113 million on a new port facility in New Bedford built specifically to cater to offshore wind farms, bolstering widespread community support for the strategy. The city’s location near two federal areas off the coasts of Massachusetts and Rhode Island slated for wind development also buoys residents’ hopes.

Says Mayor Jon Mitchell: “The arrival of the offshore wind industry in America, and especially the Northeast, is inevitable. And when it comes, New Bedford will be ready.”

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Companies show limited appetite for Mass. lease sale

Bidders were interested in only half the offshore wind development leases being auctioned by the Interior Department today.

The Bureau of Ocean Energy Management put up for auction four lease areas near Massachusetts totaling 742,000 acres and with the potential to support 4 gigawatts of commercial wind generation.

But just two companies bid on two of the areas, with RES America Developments Inc. provisionally winning the lease on a 187,523-acre area for $281,285 and OffshoreMW LLC winning the lease on a 166,886-acre area for $166,886.

Speaking on a conference call announcing the auction results, BOEM Director Abby Ross Hopper said the two areas developers bid on were located closer to shore than the other areas up for auction.

Hopper rejected the idea that the low bids in today’s auction were in reaction to recent troubles the Nantucket Sound Cape Wind project has had related to its power purchase agreements, instead attributing the auction results to the acreage’s depth.

The agency does not yet know what it will do with the lease areas that did not receive bids but will consult with Massachusetts.

“I am very encouraged by the fact that two experienced wind developers decided to bid and won leases,” Hopper said.

Twelve companies were eligible to compete in the auction, including Deepwater Wind LLC, which has already leased another area off Massachusetts and Rhode Island, and U.S. Wind Inc., which won the auction of two lease areas near Ocean City, Md., in August 2014 (E&ENews PM, Aug. 19, 2014).

Hopper said BOEM set the initial asking price for the Massachusetts area lower than other auctions.

“We know developing an offshore wind facility here would be more expensive,” she said.

She also said previous wind development auctions had been held near states that had created power purchase and renewable energy credit programs in advance of the auctions.

“That impacts that value a company places on it,” she said.

Indeed, the three previous offshore wind auctions saw winning bids in the millions of dollars. The August auction of two leases near Maryland, which has a renewable energy credit program, raked in $8.7 million.



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Dirty ground starts to sprout clean energy

Ten years after remediation was complete at the E.I. DuPont Superfund site in Newport, Del., the area had few options for reuse.

An 18-inch layer of soil capped a landfill where the toxic byproducts of pigment manufacturing had been dumped for decades. A barrier planted between the landfill and a nearby stream prevented the chemicals from migrating. The contamination no longer posed a threat to the environment or workers at nearby factories. But the land wasn’t being used.

The cap was protective only so long as nothing penetrated it, making building anything on the site virtually impossible.

“Redevelopment was a big issue for this site because you cannot dig,” said Dina Toto, remediation director for DuPont. “It was just sitting there.”

But in 2011, Tangent Energy Solutions approached DuPont with a novel idea to turn the barren land productive: solar panels.

Today, the 0.5-megawatt solar array at DuPont Newport has been online for almost a year, generating more than 1,000 megawatt-hours of electricity.

Building clean energy on contaminated ground is a growing trend for Superfund sites, brownfields and landfills, thanks in part to an initiative launched by U.S. EPA in 2008.

The RE-Powering America’s Land Initiative encourages renewable energy development on contaminated sites by providing technical assistance to developers and educating them about available liability protection.

Renewable energy is being produced at more than 128 contaminated sites across the country with a cumulative installed capacity of 773 megawatts, according to EPA. Solar photovoltaic arrays have been installed on 110 sites, with wind turbines located at 21 others. Geothermal, hydropower and biomass projects have been developed on other contaminated areas. In some instances, the renewables are used to power ongoing remediation efforts.

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Big setback for Cape Wind as utilities terminate power deals

The Cape Wind project suffered a major blow yesterday when two utilities opted to terminate agreements to purchase power from the planned offshore wind farm.

Northeast Utilities and National Grid had agreed to purchase more than 75 percent of the power produced by Cape Wind’s planned 130-turbine wind farm in Nantucket Sound. Today, the utilities attributed their decision to terminate the contract to Cape Wind’s failure to meet a Dec. 31 financing deadline for the $2.5 billion project.

“National Grid is disappointed that Cape Wind has been unable to meet its commitments under the contract, resulting in [the] termination of the power purchase agreement,” National Grid spokesman Jake Navarro said in a statement.

Northeast Utilities spokesman Michael Durand wrote in an email that, under the terms of the contract, Cape Wind could have posted financial security in order to extend the deadline for financing but decided not to.

“Therefore the contract is now terminated,” he wrote.

Cape Wind has previously characterized its power purchase agreements as key to securing financing, and the utilities’ decision raises questions about whether the developer will be able to close financing without the contractors.

But Cape Wind spokesman Mark Rodgers said the developer does not “regard the decision to terminate the contract as valid,” citing a contract provision that would allow delays in reaching project milestones caused by “unusual, unexpected and significant events.”

Those events should include the “unprecedented and relentless litigation the Alliance to Protect Nantucket Sound” has filed to block the project, Cape Wind President Jim Gordon wrote in a letter to the utilities Dec. 31 urging them not to terminate their contracts.

The alliance, which opposes the project for economic and aesthetic reasons, has filed more than 20 administrative and judicial challenges to Cape Wind.

“This exceptional level of litigation against Cape Wind for the purpose of delay is extraordinary, unusual, unexpected and significant,” Gordon wrote. “It has been completely beyond Cape Wind’s control and could not have been prevented or avoided.”

Gordon said he expected the project to overcome the latest challenge and secure financing in 2015.

Alliance President and CEO Audra Parker heralded the utilities’ decision, saying it “speaks to the poor economics of the project.”

Northeast Utilities had agreed to purchase 27.5 percent of Cape Wind’s production, and National Grid had agreed to purchase 50 percent. The average residential electricity customer would have paid an extra $1.50 per month under the contract.

“This is very bad for Cape Wind but great news for ratepayers across Massachusetts,” Parker said.

Outgoing Massachusetts Gov. Deval Patrick (D) has championed the Cape Wind project since taking office in 2007. His administration has even funded the construction of a $100 million new port facility in New Bedford, Mass., to cater to the needs of the offshore wind industry. In September, Cape Wind signed a lease to use the facility beginning in 2015.

Patrick spokeswoman Jesse Mermell said today that the news about Cape Wind has not put a damper on the governor’s enthusiasm for the industry.

“The future of offshore wind in the commonwealth remains bright,” she said.


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