Monday, February 10 2014
Updated: Tuesday, February 11 2014
The deal is a blow to Siemens, which had announced a preliminary agreement in October 2011 with Deepwater to become the launch customer in North America for its new 6MW offshore wind turbine.
A Deepwater spokeswoman tells Recharge that the agreement expired at the end of 2012 without final terms being reached. That apparently opened the door for Alstom of France.
Siemens, however, has locked down supply of 130 3.6MW turbines for Cape Wind, the only US commercial-scale offshore wind project. Developer Lake Erie Economic Development Corporation had indicated it wants Siemens 3MW turbines for its demonstration project off Cleveland. Fishermen's Energy has selected China's XEMC for its pilot off New Jersey.
Deepwater describes the Alstom accord as a “pivotal point” in development of the Block Island project to be located in Atlantic Ocean state-owned waters off the coast of Rhode Island.
The developer, majority-owned by hedge fund DE Shaw, now hopes to have the turbine foundations in place in late 2015 and the turbines commissioned in 2016.
"This agreement represents a giant leap forward for the Block Island Wind Farm, and the start of turbine construction just last month marked a major project milestone,” says Deepwater chief executive Jeff Grybowski.
Deepwater says it made an initial multi-million dollar payment to Alstom last December that allowed the French vendor to begin the manufacturing process for the turbines.The blades and towers will be made in France in Cherbourg, and the nacelles and generators in Saint-Nazaire.
The blades will be delivered to Deepwater Wind in Europe in April.
"Deepwater Wind’s multi-million dollar payment to begin manufacturing our project’s 15 blades ensures that our project will qualify for the federal Investment Tax Credit,” says Deepwater Wind chief executive Jeff Grybowski.
"When combined with engineering and permitting work we already completed, we’re confident this payment puts us significantly over the required 5 percent ‘safe harbor’ for the ITC.”
The ITC reduces federal income taxes for qualified owners based on capital investment in a project. The incentive expired last year.
The partners anticipate that Alstom’s technology will boost the project's capacity factor to 47% from an earlier 40% that Deepwater had initially planned.
While more powerful, they say the turbines will be about 10% shorter at 589-feet than the developer's maximum height allowance provided for in its permit filings.
A separate contract calls for Alstom to provide 15-year service and maintenance for the turbines. Deepwater says the partnership will create local jobs and boost economic activity in Rhode Island. These include O & M jobs that Deepwater will fill to support the project, while Alstom will create a base in the state for project services and to perform pre-installation work.
Alstom will also investigate opportunities to carry out turbine assembly activities in Rhode Island.
Alstom says that Block Island represents an important technological step for the Haliade turbine, and will enable the vendor to develop its offshore technology to the point where it can launch serial production.
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