 Off-Shore Wind Project Gets Lift - By Ken Silverstein Daily IssueAlert 8/26/2004 Free Copyright 2004. All rights reserved. An off-shore wind project in Nantucket Sound got a kick start. Now that a U.S. appeals court and the U.S. Department of Energy have weighed-in and removed some obstacles, proponents of the proposed site say that the region will be unburdened of dirtier fossil fuels and provide much needed clean power to nearby demand centers with the $700 million facility. The specific site has been under contention, with opponents arguing that it requires state approval in addition to federal authorization. But, a recent decision by the U.S. Circuit Court of Appeals for the First Circuit in Boston has said that the state’s jurisdiction does not extend beyond a three-mile radius—where the Cape Wind project would be located, or five miles outside that perimeter. The decision allows Cape Wind Associates to keep a test tower that tracks wind speed, wind direction and wave heights. Meantime, the Energy Department along with the Massachusetts’ Energy Facilities Siting Board have released a study showing that the New England region is in desperate need of new energy sources and that wind farms would be a good alternative. Not only would they ease the area’s growing reliance on natural gas, but renewable energy would also allow the region to hedge against those high prices. The switch is needed: In 1980, Massachusetts produced less than 1 percent of its energy needs from natural gas but now that number is about 41 percent, and is expected to be 49 percent by 2010. That analysis is being used by the U.S. Army Corps of Engineers, which is the main permitting agency for the Cape Wind deal. Still to go: An examination of the precise location that would be used and an environmental impact statement as it relates to birds, fish and recreational boating, as well as scenic views and navigation. If the harm can be mitigated or avoided altogether, “the power from the wind farm is needed on reliability and economic grounds,” says staff of the state’s siting board. But, getting the environmental thumbs-up is not a given. Sixteen sites have been identified as those that could suffer aesthetically from the project, says Pawtucket, R.I.-based Public Archaeology. It is not just a “not-in-my-backyard” issue but one that would destroy marine resources and impede commercial and residential activities, say opponents. Many business groups, furthermore, view the undertaking skeptically, noting that the waterway is inextricably linked to the local economy and quality of life there. According to the Alliance to Protect Nantucket Sound, there is no national off-shore permitting process. A program should be in place that provides a road map, it adds, noting that the ad hoc basis by which the Cape Wind project is functioning will set a dangerous precedent for future deals. It wants the National Oceanic and Atmospheric Administration (NOAA) or the Environmental Protection Agency to have final say—not the U.S. Army Corps of Engineers. "For a region that earns its bread and butter on how it looks and its beauty, it has us gravely concerned," said Wendy Northcross, the Cape Cod Chamber of Commerce's chief executive. "The trade-off here is they're looking for a massive, massive amount of our natural resources in the hope of getting some spot power generated that's not even guaranteed to come to the Cape and islands." Vast Potential The Cape Wind project would represent the country's first off-shore commercial wind-powered electricity generation complex. It would include 130 wind turbines that generate 420 megawatts of electricity at its peak and 130 MW on average. The wind farm has drawn ardent support from clean energy advocates and others who say it would produce about half the electricity needed by Cape Cod and the nearby islands of Martha's Vineyard and Nantucket on an average day as well as combat global warming, ease pollution and lessen the country's reliance on imported oil. Furthermore, Massachusetts has renewable portfolio standards that mandate wind and other green energy forms make up 1 percent of the state's power in 2003 and 4 percent by 2009. Off-shore wind adds to an already vast potential in the United States, according to a study by Stanford University. In an article that appeared last year in the Journal of Geophysical Research, Cristina Archer and Mark Jacobson found that a quarter of the country has winds that are strong enough to provide electric power at costs equal to that of new natural gas or coal plants, although that doesn’t include the added costs of transmission and back-up generation. Some studies have shown that the Horseshoe Shoal area within Nantucket Sound where the 24 square-mile project would be based has several positive characteristics to harvest wind for the purpose of making electricity. They include strong gales, shallow water and low waves. The project developer, Cape Wind Associates, projects $800 million in energy savings over 20 years for New Englanders. The current plans to have wind mills online by 2005 may be delayed given the added studies that must be performed. The Energy Department’s report lends credence to the idea. It says that New England relies too heavily on natural gas and that it has no indigenous fossil energy sources of its own. That danger has already forced the region to use more oil-fired generation, which has increased by 2,756 megawatts between 2002 and 2003. Meantime, the area gets some of its energy from Liquefied Natural Gas, which if such imports were cut off could have a devastating effect. The “use of renewable energy to generate electricity can play a significant role in offsetting price volatility in electric generation by providing a natural hedge against fuel supply restraint and natural gas volatility,” says the Energy Department report. At the same time, advocates of the project say that the culmination of more renewables and the use of fewer fossil fuels would result in a reduction of particulate matter, sulfur dioxide, nitrogen oxide and carbon dioxide, all because the Cape Wind facility would produce 75 percent of the power consumed on Cape Cod. Strong Opposition Wind energy, of course, has its critics who say that the power source is unreliable and the logistical difficulty of getting it hooked to the grid IS high. But this debate is less about the usual pros and cons and more about whether such a project ought to be placed in a body of water that thrives because of its scenic beauty. Opponents of it therefore come from a wide spectrum, including environmentalists and business men and women who argue that this particular body of water is unsuited to house a huge wind farm. Moreover, the wind farm would produce just 130 megawatts of power on average—well short of the 25,120 megawatts during New England’s peak demand. They are asking if the benefits really outweigh the costs. Cape Wind could still sink. But, the recent lifts given it by the Energy Department and the U.S. appeals court have boosted the possibilities that the wind farm will become a reality and mark a new era in the evolution of wind power in the United States. UtiliPoint's IssueAlerts are compiled based on the independent analysis of UtiliPoint consultants. The opinions expressed in UtiliPoint's IssueAlerts are not intended to predict financial performance of companies discussed, or to be the basis for investment decisions of any kind. UtiliPoint's sole purpose in publishing its IssueAlerts is to offer an independent perspective regarding the key events occurring in the energy industry, based on its long-standing reputation as an expert on energy issues. Copyright 2004. UtiliPoint International, Inc. All rights reserved. |
