U.S. inks offshore 28-year lease with Cape Wind, first of its kind

KEN SALAZAR (LEFT), SECRETARY OF THE U.S. DEPARTMENT OF INTERIOR, signed a 28-year lease with the developers of Cape Wind on Wednesday. Salazar is seen above at a Sept. 22 meeting in Washington.
Posted 10/6/10

ATLANTIC CITY, N.J. – The construction of a wind farm in Nantucket Sound nudged closer to reality Wednesday with the developer signing a lease with the federal government.

Developer Cape Wind Associates inked the deal for 25 square miles of ocean space during a ceremony at an offshore wind conference sponsored by the American Wind Energy Association.

Under the 28-year lease, Cape Wind will pay $88,278 in annual rent prior to the farm’s operation. Once the farm goes online, rent will range between 2 percent and 7 percent based on revenue from selling the electricity to the regional market. Plans call for the project to include 130 turbines producing an average of 182 megawatts, or enough to power more than 200,000 homes.

The lease with the U.S. Department of Interior marked the first of its kind.

“This is the beginning of a new era for our nation in offshore energy production,” said Secretary of the Interior Ken Salazar. “Responsibly developing this clean, renewable, domestic resource will stimulate investment in cutting-edge technology, create good, solid jobs for American workers, and promote our nation’s competitiveness, security, and prosperity.”

The wind farm – which would lie 5 miles off mainland Massachusetts and 9 miles off Martha’s Vineyard - has been fraught with controversy. Property owners have expressed concern about the turbines ruining views and critics have questioned the cost of electricity from the farm.

On Wednesday, Cape Wind hoped to move the spotlight to the potential benefits of the project.

“We’re ready to roll up our sleeves and get to work building America’s first offshore wind farm that will create hundreds of jobs, increase our energy independence and promote a healthier and more hopeful energy future,” Cape Wind President Jim Gordon said.

East Providence-based ESS Group Inc., a consultant on the Cape Wind project, quickly hailed the agreement. The company has provided technical support for environmental studies and impact assessments, permit applications and related studies for the past 10 years.

“Continued federal support of projects like Cape Wind confirms our nation’s commitment to renewable energy and sets the stage for further development of offshore wind projects to meet U.S. energy needs,” said ESS Vice President of Energy and Industrial Services Christopher Rein.

Signing of the lease comes as little surprise. In April, Salazar signed the Record of Decision for the Cape Wind project, which paved the Interior Department’s Bureau of Ocean Energy Management, Regulation and Enforcement to issue the lease.

The signing comes as Providence-based Deepwater Wind looks to build an eight-turbine wind farm 3 miles off the coast of Block Island. That farm would sit entirely within state waters, making a federal lease unnecessary.

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