Mass. Stuck With $113M Marine Terminal Built for Failed Offshore Wind Farm

By Barbara Hollingsworth | April 23, 2015 | 4:16pm EDT

 

Massachusetts Gov. Deval Patrick (left) looks on as Interior Secretary Ken Salazar (right) announces approval of Cape Wind, the nation's first offshore wind farm, in Boston on April 28, 2010. (AP photo)

(CNSNews.com) – Massachusetts taxpayers are stuck with a $113 million marine terminal started by former Gov. Deval Patrick as a construction staging area for a failed wind farm project that was supposed to provide clean energy and hundreds of jobs for the state's residents.

Touted as “America’s first offshore wind farm,” Cape Wind planned to erect 130 Siemens wind turbines five miles off the coast of Cape Cod and harness the strong winds blowing through Nantucket Sound to produce electricity.

But the $2.6 billion project’s contracts with the state’s two largest utilities were terminated in January after Cape Wind missed its December 31 financing deadline.

Last July, Energy Secretary Ernest Moniz heralded Cape Wind, which was awarded a $150 million loan guarantee by his department, as the beginning of “a strong U.S. offshore wind industry.”

“With this agreement and with the investments we have made in infrastructure like the South Coast Marine Commerce Terminal, we have positioned Massachusetts as a first-in-the-nation hub for a new offshore wind industry that will bring jobs and a clean source of Massachusetts-made energy for future generations,” Patrick said last September when he announced a lease agreement for the terminal.

“I am very happy Cape Wind will be built in New Bedford… Governor Patrick’s administration deserves credit for its work to support this project and to make Massachusetts a leader in clean energy,” echoed Sen. Elizabeth Warren (D-MA), just three months before the wind farm project collapsed.

The project faced stiff opposition from local communities and wealthy residents ranging from the late Sen. Ted Kennedy to billionaire William Koch, both of whom had family compounds on Cape Cod.

The Alliance to Protect Nantucket Sound complained that the 440-foot high wind turbines would have been visible from the shore and “would look like LaGuardia Airport” at night. The group also said the wind farm would be a threat to navigation and commercial fishing in the sound while significantly increasing local residents’ electricity bills.

Instead of creating hundreds of new jobs and 360-million megawatts of clean energy, Cape Wind created a new problem for state officials: What to do with the unfinished $113 million marine terminal?

An aerial view of the Marine Commerce Terminal in New Bedford, Mass. which was built to support the construction of the Cape Wind project. (Massachusetts Clean Energy Center)

Last month, the Massachusetts Clean Energy Center (MassCEC), a quasi-governmental agency, announced it had terminated its $4.5 million, two-year contract with Cape Wind to rent the 28-acre terminal, which is located in New Bedford, Mass.

MassCEC has since received three bids for operation of the terminal, which is still under construction and $10 million over budget. The winning bidder is expected to be announced by this summer.

But Massachusetts Energy and Environmental Affairs Secretary Matthew Beaton, who chairs MassCEC, says renting the empty terminal will likely not bring in the same amount of revenue as the Cape Wind deal promised.

“I think it will be less. I think it’s just a question of how much less,” he told The Boston Herald.

According to the U.S. Energy Information Administration (EIA), the estimated levelized cost of electricity (LCOE) for new generation resources in 2019 – defined as “the per-kilowatt hour cost (in real dollars) of building and operating a generating plant over an assumed financial life and duty cycle” – will be $204.10 for offshore wind, or more than three times the $66.30 cost for producing electricity using natural gas.

Related: Massive Mass. Wind Farm Project Could Lose Tax Credit Dec. 31

Related: NStar's Cape Wind Pact Pays $940M Over Market

Related: Nation's First Offshore Wind Farm Approved for Massachusetts

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