Providence-based Deepwater Wind and Rhode Island energy officials say the company’s win of the first two federally auctioned offshore wind-farm sites is a milestone in the state’s goal to harness wind resources, create hundreds of new jobs and attract energy industries to help pump up the Ocean State’s sluggish economy.
The company, which employs 10, remains a long way from fulfilling the now five-year-old goal of creating 800 local jobs. A host of hurdles still stand in the way, including a long list of needed state and federal permits for a small demonstration project off Block Island that’s generated stubborn local opposition and a much larger project of up to 200 turbines in federal waters off the state’s coast.
But the July auction wins were a necessary first step in the company’s bid to become a leader in the nascent wind-energy industry in this country.
“This is certainly a big step forward,” Deepwater Wind CEO Jeff Grybowski said when the company’s $3.8 million bid won both federal leasing sites, totaling 256 square miles off the coasts of Rhode Island and Massachusetts.
“Winning the two sites is consistent with what we’ve planned,” said Grybowski. “It allows us to eventually develop the entire site, which can accommodate up to 1,500 megawatts of power. The more megawatts built, the more jobs created.”
Only two other companies, Sea Breeze LLC and US Wind Inc., participated in the auction, out of the nine companies eligible to bid.
Had Deepwater won only one site, the plans would have been cut in half to about 100 turbines – not preferable, but still greater than the 40- or 50-turbine minimum needed to achieve an economy of scale, Grybowski told Providence Business News last week.
The cut wasn’t necessary, partly because Deepwater’s bid was strengthened by its Joint Development Agreement with the state, said Bureau of Ocean Energy Management spokeswoman Tracey Moriarty.
“BOEM considers holding these types of agreements to be key indicators of success for a potential project,” Moriarty said.
That Joint Development Agreement also earned Deepwater a 20 percent credit on the cost of one of the two sites located on the Outer Continental Shelf between Block Island and Martha’s Vineyard, identified by BOEM as the north and south lease areas.
Deepwater Wind’s winning bid on the higher-priced North Lease Area was $3,744,135, but with the 20 percent credit was $2,995,308, said Moriarty.