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.”

The city’s greatest asset has always been its deepwater harbor. It’s what persuaded Nantucket’s Quakers to move their whaling businesses onshore in the early 1800s. It’s what has kept the city’s groundfishing and scalloping industries afloat.

And it’s what persuaded state officials to locate their Marine Commerce Terminal in New Bedford instead of Boston.

In 2010, the Massachusetts Clean Energy Center, or MassCEC, decided to build a specialty port facility in New Bedford, when offshore wind developers like Cape Wind started to think about the logistical challenges of shipping turbine components to the states. The multiton turbine parts would need to be assembled on land before being installed at sea, and the commonwealth wanted to be prepared.

MassCEC, created by former Gov. Deval Patrick (D) to lead the state’s renewable energy initiatives, commissioned a study of seven ports to find one best suited for an offshore wind reboot. Ultimately, the facility would accommodate turbine parts more than 400 feet long and handle loads of 4,000 tons per square foot.

“Given the enormous new potential for clean energy that offshore wind could provide and the economic development benefits of building a new industry, this seemed like a high-value, long-term opportunity for the commonwealth,” MassCEC Executive Director and Chief Executive Alicia Barton said.

After narrowing the choices down to Boston and New Bedford, the study’s authors recommended New Bedford, primarily due to geography.

Located south of Cape Cod in Buzzards Bay, New Bedford has easier access to Nantucket Sound, where Cape Wind’s 130-turbine project is planned. It’s also closest to two other federal renewable energy development areas located between Martha’s Vineyard and Rhode Island. A hurricane barrier guards the harbor, protecting it from storm surge and flooding.

The study also noted that building the facility in New Bedford would spur more economic development than building the same facility in Boston.

During the two years it would take to construct the facility, Boston’s business output would expand by nearly $19 million, while New Bedford’s would expand by more than $44 million, according to the report.

In New Bedford, where the 10 percent unemployment rate nearly doubles Massachusetts’ as a whole, the project was more than welcomed; it was embraced as a path to a better future.

Community activist John “Buddy” Andrade sees offshore wind as a way to change the lives of many in the inner city, most of whom have no college education and often struggle to find well-paying jobs.

“What we are talking about is lifting our community out of poverty and rebuilding our middle class. This would stop people from moving away, it would convince people to build homes here, to build families here,” he said.

The first customer

The Marine Commerce Terminal was built to fit the schedule of the Cape Wind project. When ground was broken on the terminal in April 2012, Cape Wind agreed to use the facility to stage its 130-turbine farm in Nantucket Sound if it was completed by January 2015. Construction wrapped up on the project this month.

In September 2014, Cape Wind President Jim Gordon and Patrick held a Boston news conference to celebrate Cape Wind’s lease for the terminal, an event celebrated in New Bedford as the first step toward economic revival.

But earlier this month, Cape Wind was dealt a potential death blow when two utilities terminated their contracts to purchase more than 75 percent of the project’s power (Greenwire, Jan. 7). The decision followed Cape Wind’s failure to reach a milestone of closing financing by the end of 2014 (Greenwire, Dec. 18, 2014). New England’s grid operator has now suspended Cape Wind from participating in the region’s wholesale energy markets (Greenwire, Jan. 26).

Cape Wind has argued that the power purchase agreement termination is illegal, saying specific portions of the contract allow for delays in project milestones. Company spokesman Mark Rodgers also called the energy market suspension irrelevant, saying, “Cape Wind will be qualified well in advance of coming online and actually producing energy for sale.”

He did not respond to questions about the project’s future but did say he appreciated New Bedford officials’ “extremely proactive and visionary” promotion of Cape Wind and the industry as a whole.

‘Our golden opportunity’

To city residents, the significance of the terminal is twofold.

No matter what type of cargo the terminal receives, it automatically expands the harbor’s capacity because of its ability to bear weight. Container shipments and other heavy cargo previously off limits to New Bedford’s piers can be landed at the terminal, which is expected to employ 100 people.

But because the facility has been branded as a place built for wind turbine components, city officials are hoping to leverage it to make New Bedford the “epicenter” of the offshore wind industry and to attract an entire supply chain. City leaders don’t just want developers to use the terminal to ship and stage their parts; they want turbine manufacturers to build factories in town. They want New Bedford workers to be tasked with maintaining the turbines at sea.

“We are like many older industrial Northeastern cities where we have suffered plant closings and chronic unemployment that have eroded our tax base,” Mitchell said. “We see offshore wind as our golden opportunity.”

In order to attract other aspects of the offshore wind industry, the city needs more than just one developer to use the terminal. Because of this, city leaders have been able to rationalize that while having Cape Wind as the first customer would be helpful in achieving this goal, New Bedford isn’t dependent on that one developer as long as others do business there instead.

Mitchell has also long cautioned residents that the change isn’t expected to take place all at once. He expects it could take five to 10 years for European manufacturers to decide there’s enough business at the terminal to justify building a factory nearby.

The approach may sound like a pipe dream, but New Bedford modeled its strategy after the German port city of Bremerhaven, a similarly sized city that had fallen on hard times until offshore wind came to town.

In April 2013, Mitchell led 25 community and business leaders on a trade mission to Germany to see the transformation the industry had there. Between 2005 and 2012, that 114,000-person city saw unemployment drop from 25 to 14 percent, Bremerhaven officials told the New Bedford Standard-Times, which sent a reporter on the trip. By 2013, the offshore wind industry employed 3,000 city residents at four factories and a research center.

JA Apparel Corp. CEO Tony Sapienza, who leads the city’s Economic Development Council board and received a report from his staff detailing observations from their trip to Germany, said he sees the wind industry as a way to increase the city’s cultural appeal.

“Offshore wind coming to New Bedford would mean a better, bigger downtown, more recreational attraction and more cultural attractions, everything that would be a byproduct of economic development,” he said.

To help prepare residents for the city’s “inevitable” transformation, the Economic Development Council last year formed its own Wind Energy Center to focus on ways to prepare the city workforce for jobs in the offshore wind industry. The local state and community colleges have also pitched in to create new class offerings to ensure that when the jobs come, New Bedford residents are qualified for them.

For example, the local Bristol Community College has revamped its two-year engineering technology program to allow students to concentrate on wind technology. Students will still learn the basics of engineering technology but will take one class that focuses exclusively on wind power. In the basic mechanics and physics classes, instructors also use wind power as examples, said Meghan Abella-Bowen, associate dean for science, technology engineering and math initiatives.

Abella-Bowen said she sees the new program as a way to rebrand the school to fit in with “the buzz in our region about the wind industry.”

More uncertainty in the wind

Unfortunately for New Bedford, Cape Wind’s troubles aren’t the only snags the industry has faced.

News of the company’s power purchase troubles followed the expiration of federal renewable energy tax credits at the end of last year, which planted doubt about whether other developers would be able to secure investors.

And yesterday, the Interior Department held a highly anticipated lease auction for development of a 742,000-acre area off Massachusetts with uninspiring results.

While the area is the largest designated by the federal government for offshore wind development and has the potential to produce up to 4 gigawatts of commercial wind generation, developers bid on just two of the four lease parcels available (Greenwire, Jan. 29).

The two leases ultimately were awarded for less than $200,000 each, a small fraction of what developers had paid in other wind energy auctions where winning bids went as high as $8.7 million.

OffshoreMW LLC, one of the companies with a winning bid, is interested in potentially using the New Bedford terminal but already has a community benefit agreement with the Vineyard Power Cooperative that could eventually involve using Martha’s Vineyard as a base for wind farm maintenance, said Vice President Erich Stephens.

“Anyone thinking about building a project today would be looking at New Bedford as a place for staging construction,” Stephens said. “But the ongoing operations and maintenance, right now we see that as being on Martha’s Vineyard.”

To some in New Bedford, these snags are a sign that the city should not be so feverishly focused on offshore wind.

Former Mayor Scott Lang, who ran the city when the state picked New Bedford for the terminal project, said he never thought the facility should have just one use.

“I would be very excited to have Cape Wind be the first tenant, but the idea that we would focus only on renewable energy, I don’t know how it serves the city,” he said. “To lock into any one niche is a huge mistake. When that niche market has bumps in the road or doesn’t get off the ground, people are going to be questioning it.”

Lang, a longtime political rival of Mitchell, said the expiration of federal renewable energy tax credits further shatters Mitchell’s vision of a pipeline of projects spurring broader industry interest in the city.

Lang faults Mitchell and his supporters for presenting wind as the city’s panacea. Over the years, many have proposed ways to save the city like bringing a casino or aquarium to town, or getting rail service from New Bedford to Boston.

None of those plans has come to fruition. And though the Marine Commerce Terminal has actually been built, Lang charged Mitchell with giving residents false hope about its potential.

“I’m very hopeful for this facility, and I think it will be able to increase our operations in the city whether wind comes or not,” he said. “But you can’t put all your eggs in one basket and hope it will have a transformative effect.”

Abella-Bellow also said the community college had been careful in crafting its wind engineering program, ensuring that students could get jobs in other sectors if the offshore wind industry doesn’t come to town or takes a while to get there. The program is designed so a graduate with a wind engineering degree could first get a job at a natural gas or coal plant while waiting for an offshore wind project to come online, she said.

“We wanted to be broad because we do feel that southeastern Massachusetts is the offshore wind location, but it’s in our best interest to make sure our students are well-rounded,” she said.

Perhaps even more concerning to naysayers is that while the New Bedford terminal was built specifically to handle wind turbine parts, it’s not the only facility in the region that can.

Quonset Point in Rhode Island has attracted the eye of offshore wind developers, including Cape Wind, which was set to use the facility before the New Bedford terminal was completed.

While the New Bedford terminal has almost double the capacity of Quonset, another developer, Deepwater Wind, has already signed a lease with Quonset for its five-turbine project off Block Island in Rhode Island. Deepwater Wind has also signaled it would use Quonset for a larger project located in a federal wind energy area between Martha’s Vineyard and Rhode Island.

In the past, Deepwater Wind has expressed interest in using New Bedford as a secondary facility, but spokeswoman Meaghan Whims would not elaborate this month, saying only, “We believe the Northeast is home to some of the country’s best offshore wind port facilities.”

And while Massachusetts officials often boast the Marine Commerce Terminal is the “first port facility in the country purpose-built to serve the offshore wind industry,” this month MassCEC’s Barton was quick to emphasize that the terminal will handle multiple types of cargo — not just wind turbine parts.

“We are not waiting around for Cape Wind, that’s the take-home message for us,” she said.

Barton noted that the center has sent out a request for proposals for a terminal operator, who would be tasked with organizing the various shipments to the terminal. The operator would have to give wind projects priority while still soliciting other cargo business.

“From the beginning, we knew there were uncertainties around Cape Wind, and we are planning for the long term by bringing on a terminal operator to balance offshore wind uses with other types of marine cargo,” she said.

Not giving up

Despite the setbacks, many city residents are unwavering in their faith that the offshore wind industry will come to — and transform — New Bedford.

They point out that while Cape Wind has terminated land-use contracts with other facilities, including Quonset, its lease agreement for the New Bedford Marine Commerce Terminal remains in place.

And while residents acknowledge that the city can’t wait forever for Cape Wind to recover and that the terminal should take in other types of cargo in the meantime, they still see shipments of wind components as the only true way to spark a citywide economic revival.

“This offshore wind stuff, it has to take hold here,” said activist Andrade.

Mitchell, who has previously traveled to Washington, D.C., to lobby for renewable energy tax credits, has promised to continue doing so. The city’s Wind Energy Center also has pressured the state Legislature to adapt specific renewable portfolio standards for offshore wind as a way to finesse power purchase agreements for developers.

And New Bedford officials have played host to potential offshore wind investors from Germany, Japan and Denmark, giving tours of the city and the terminal as a way to help developers and woo business.

“We see offshore wind as an opportunity that we are pursuing even though success is not guaranteed,” Mitchell said. “Not pursing an industry that holds such promise would be incredibly foolish.”

Even if it takes five or 10 years, Mitchell said the city is willing to keep betting on offshore wind.

“The wind isn’t going anywhere,” he said. “And neither is New Bedford.”

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