Cape Wind sails past legal morass
Cape Wind has moved beyond the point where additional legal challenges would slow it down, with the project steaming towards first power generation in 2016, a spokesman claims.
At times during Cape Wind’s long development, it has felt for many observers as if opponents of the project have held the power to delay it indefinitely through a seemingly endless series of lawsuits.
But the handful of recent legal victories for the project – bringing its total number of legal wins to 26 – were decisive, says Mark Rodgers, Cape Wind’s communications director.
“At the moment, there is no [legal action] outstanding,” Rodgers tells Recharge.
“It would not surprise anybody if [opponents] launched appeals of some of their recent court losses. But we don’t believe weak appeals of strong opinions at this point would further disrupt our timetable.”
“All signs are looking favourable to us.”
In January of this year an appeals court upheld Cape Wind’s approval by the Federal Aviation Administration; in March a District Court judge swatted down four linked-up lawsuits challenging the project’s approval by the Interior Department; and in May a District Court dismissed outright litigation challenging the legality of one of Cape Wind’s two existing power purchase agreements (PPAs).
With those challenges behind, the immediate focus for Energy Management Inc., the Boston-based owner of Cape Wind, is nailing down the remaining finance it needs to install the 101 Siemens 3.6MW turbines (equivalent to 363.6MW of capacity) for which it already has PPAs.
The recent legal decisions were “very helpful to our momentum right now – and our financing efforts”, Rodgers says.
Cape Wind has declined to reveal the full amount of money it needs to install the project, as it considers the figure proprietary. Several years ago, a consultant working for the state of Massachusetts estimated the cost of the full project – including the 29 additional turbines for which Cape Wind does not yet have PPAs – at $2.6bn.
To date, three banks – the Bank of Tokyo Mitsubishi, Rabobank and Natixis – have collectively committed “in excess of $400m” to the project; Danish export bank EKF has committed $600m; PensionDanmark has committed $200m in mezzanine debt; and Siemens may take a $100m equity stake.
“There will be additional announcements to be made this year, on both the debt and equity side,” Rodgers says. “We expect to complete financing by the end of the year.”
“It’s been a long road to get to this point, but we expect things are going to start moving fairly quickly.”
The developer anticipates installing Cape Wind across two building seasons in Nantucket Sound, off the coast of Massachusetts. At present, “season A” looks to get the 101 turbines already under a PPA in the water; and “season B” would see the remaining 29 installed (once a PPA has been clinched).
“We’re working on [PPAs] for those 29 turbines,” Rodgers says. “We’re optimistic.”
Under any scenario, Cape Wind should be delivering power to the grid by 2016 at the latest, he says.