Cape Wind offshore wind farm to negotiate power purchase agreement with National Grid
Massachusetts Governor Deval Patrick Wednesday announced that the proposed offshore wind farm in Nantucket Sound, Cape Wind, has secured a deal to negotiate for a long-term power purchase agreement for the electricity it produces at what would be the U.S.' first offshore wind farm.
“For both reducing greenhouse gas emissions and launching the offshore wind industry that will achieve those reductions, it is essential for Cape Wind, like offshore wind in general, to move from wishful thinking to reality,” said Governor Patrick in a statement. “A contract with an electric distribution utility like National Grid will move Cape Wind one step closer to reality.”
The power purchase agreement between Cape Wind and Massachusetts-based electricity provider, National Grid (NYSE:NGG), is essential for Cape Wind to secure project financing and get it into construction and operation in time to qualify for federal incentives under the American Recovery and Reinvestment Act -- incentives that would reduce the cost of the project by 30 percent.
“Today’s announcement is a demonstration of how the Patrick Administration’s vision and desire for a cleaner, more secure energy future will put Massachusetts at the forefront of the emerging offshore wind industry,” said Jim Gordon, president of Cape Wind. “We look forward to working with National Grid to deliver Cape Wind’s energy, economic and environmental benefits to the region.”
National Grid President Tom King also expressed enthusiasm about the upcoming negotiations. “We are optimistic that we will successfully negotiate a long-term power contract with Cape Wind that will achieve the renewable targets established by the Green Communities Act," said King. "National Grid recognizes that as a public utility, we need to facilitate these important renewable projects while maintaining a focus on minimizing the cost to our customers."
National Grid is expected to soon file with the state Department of Public Utilities a Memorandum of Understanding with Cape Wind laying out the rationale for such a contract, as well as the methods and timelines for an agreement. If the state regulators give approval to the process, National Grid and Cape Wind will enter into negotiations to enter into a long-term contract and submit any final pact to the state for review and approval.
The news out of Massachusetts came on the heels of the publishing of a new report by economists at the Department of Energy that found wind farms have no impact on property values of nearby homes.
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