The much-delayed Cape Wind offshore wind project could be the latest recipient of a federal loan guarantee from the Department of Energy (DOE).
The agency on Tuesday announced the first step toward issuing a $150 million loan guarantee with a conditional commitment to Cape Wind Associates. The guarantee will support construction of the 360-MW offshore wind facility that is under development off the coast of Cape Cod, Mass.
The DOE is now expected to continue monitoring the project’s development and work to reach final agreement before closing the loan guarantee. “Under the proposed financing structure for the Cape Wind project, the Department would be part of a group of public and private lenders. This co-lending arrangement will help build private sector experience with offshore wind projects in the U.S. while reducing taxpayer exposure,” the DOE said in a statement on Tuesday.
The project has secured all required permits and has been issued a commercial lease and received approval for its construction and operations plan by the Department of Interior (DOI). In December, developers signed a major contract with Siemens for the supply of 3.6-MW offshore wind turbines, an offshore electric service platform, and a service agreement for the first 15 years of commercial operations. Cape Wind developers say they have sold 77.5% of the project’s power output in long-term power purchase agreements to National Grid and NSTAR, but it is still in the financing phase.
However, the controversial project has been plagued by many long-standing legal disputes that have delayed it by more than 13 years. Legal claims raised include arguments over navigational safety, alternative locations, alternative technologies, historic preservation, Native American artifacts, sea turtles, and the adequacy of the project’s environmental impact statement and biological opinions. This March, a U.S. District judge upheld the DOI’s review and approval of the project, and rejected a set of four major lawsuits against the project.
Cape Wind says project opponents are “largely funded by coal and petroleum coke magnate William Koch.”
Financing is slated to be completed during the second half of 2014, and construction will “commence shortly following the completion of financing,” developers of the project say.
—Sonal Patel, associate editor (@POWERmagazine, @sonalcpatel)