Deepwater signs US offshore lease

Deepwater Wind chief executive Jeffrey Grybowski signed a lease on Thursday at the US Interior Department for two parcels in an area in federal waters facing Rhode Island and Massachusetts.

Deepwater, whose main investor is hedge fund DE Shaw, in July submitted a winning $3.83m bid in the country’s first commercial offshore wind energy competitive lease auction.

The developer plans a utility-scale wind farm of up to 1,000MW in the area with a regional transmission system linking Long Island, New York, to southeastern New England.

Deepwater previously paid a $900,000 deposit to participate in the auction and will pay the balance now that the lease has been signed.

In addition, it will pay the federal government annual rent payments of approximately $500,000 beginning this year, until a wind farm is operational on the site. Once this occurs, Deepwater is obligated to pay an annual royalty fee based on the value of the energy produced.

Deepwater is also actively developing the 30MW Block Island Wind Farm in Rhode Island waters. Construction activities are expected to start this year, with commercial operation by 2015.