Cape Cod wind farm project struggles with financing

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Cape Wind, the massive wind farm planned for construction off Massachusetts’ Cape Cod, won’t close on financing by the end of the year as company officials had hoped.

This is a prospect that has opponents of the project feeling more positive about their prospects for stopping it altogether.

“Sounds like Cape Wind is clearly in trouble,” Audra Parker, president of the project’s primary opposition group, the Alliance to Protect Nantucket Sound, told the Cape Cod Times. “This is a developer, a private developer, that’s struggled for almost five years now to put full financing together, even with high-priced contracts and guaranteed revenue in hand.”

Cape Wind spokesman Mark Rodgers confirmed by email last Wednesday that the company does not expect to complete financing by the end of the year, but wrote that it expects to do so in the first quarter of next year. The project was proposed in 2001. Although it has survived repeated challenges, financing has long been considered the most significant hurdle that remains before construction can begin.

The latest cost estimate for the project was $2.6 billion, which was part of filings by the Massachusetts Attorney General’s office in 2010. Cape Wind has since lined up several pieces of the overall financing for the project, totaling about $1.45 billion, including a $150 million Department of Energy loan guarantee.

In July, the GOP-controlled House approved an energy and water appropriations bill that included a measure to bar the Energy Department loan, but last week President Obama signed a $1 trillion spending bill Congress passed on Nov. 13 that eliminated the provision.

The bill, however, requires the department to provide a report within 30 days, as well as quarterly updates on the status of litigation and the risks of litigation to the project.

Opponents recently filed an appeal of the dismissal of a federal lawsuit against the Interior Department for approving the project. The town of Barnstable also appealed an approval by the state Energy Facilities Siting Board of a plan to connect the wind farm to the electric grid.

The alliance, the town of Barnstable and several businesses are also awaiting a decision from a three-judge U.S. Court of Appeals panel on whether a power purchase agreement between the offshore wind energy developer and NStar is constitutional.

In May, U.S. District Judge Richard Stearns ruled in favor of Cape Wind, NStar and state energy regulators, who argued that the suit was barred by the 11th Amendment to the U.S. Constitution, which restricts lawsuits in federal court against a sovereign state for past actions.

The alliance, Barnstable and the businesses appealed that decision, hiring constitutional law lawyer Laurence Tribe to take their case.

Comments

5 comments on “Cape Cod wind farm project struggles with financing

  1. Pingback: Cape Cod wind farm project struggles with financing | Parker Business Planning

  2. Barbara Durkin

    Cape Wind’s struggle to obtain financing serves the interest of tax and ratepayers who are entitled to energy sources that are reliable and commercially reasonable.

    Based on the catastrophic failure of German engineers to launch a successful offshore wind project in Europe, Cape Wind should not be constructed. Based on the cost of Cape Wind projection of three times current energy cost, Cape Wind should remain a “paper only” offshore wind project.

    http://thehill.com/blogs/congress-blog/energy-environment/226050-offshore-wind-farms-are-no-public-benefit

  3. Pingback: Cape Wind Struggling To Get Financial Traction | | PassageMaker

  4. Pingback: Two Big White House ‘Green’ Cronies Unite: First Wind scored over $700 million of stimulus funds, now being acquired by SunEdison | The Green Corruption Files

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