How Trump Could Revive The Cape Wind Offshore Wind Energy Project

Offshore wind energy has been slow to take off in the U.S., and the notorious Cape Wind project is a case in point. After a 16-year slog through the courts, the project's developer, Cape Wind Associates, appears to have given up on its ambitious plans for a 130-turbine wind farm in Nantucket Sound off the coast of Cape Cod in Massachusetts.

That doesn't necessarily mean a respite for William Koch (one of the two "other" Koch brothers). Along with members of the Kennedy family, Koch has been a high profile organizer against the Cape Wind project. The federal lease for the wind farm is still in force, and the Bureau of Ocean Energy (BOEM) has in effect smoothed the way for other ocean energy projects to take Cape Wind's place.

No more Cape Wind for Cape Cod...

One measure of the effectiveness of the Koch/Kennedy lobbying campaign is the passage of a new state "energy diversity" law in 2016. The new law requires Massachusetts utilities to purchase 1600 megawatts in offshore wind energy capacity, which should be good news for Cape Wind.

However, a carve-out was written into the law. Only wind farms located more than 10 miles off the coast of inhabited areas are eligible to bid on contracts to fulfill the 1600 megawatt goal. An additional requirement is that eligible wind farms must have acquired their federal leases through a competitive process after 2012.

As a pioneering offshore wind project, Cape Wind does not meet either of those requirements. It was the first offshore wind development in the U.S. to acquire a commercial federal lease but that occurred in 2010, before BOEM established a competitive bidding process for offshore wind all along the Atlantic coast.

In addition, Cape Wind's leased area is located within the 10 mile limit.

...but a wind energy phoenix could rise from the ashes...

One interesting twist is that Cape Wind's federal lease is in force until 2041. Although recent news reports indicate that the company is preparing to ask BOEM to rescind its lease, another possibility is that Cape Wind could transfer its rights to another developer.

If a transfer is not legally permissible, BOEM could open up the area to a new round of competitive bidding. That's a long shot considering that the winning bid will face renewed blowback from the Koch lobbying effort, but it could be a risk worth taking.

The 2016 state law simply sets a 1600 megawatt goal for offshore wind capacity. It does not appear to provide for sourcing restrictions once that goal is met. Massachusetts utilities may have trouble meeting the 1600 megawatt goal within the next year or so, but a slew of wind farms are in the pipeline all along the wind rich Atlantic coastline.

Meanwhile, offshore wind costs are dropping globally as the technology improves. The increased offshore development activity also enables economies of scale to kick in throughout the supply chain.

That's all to the benefit of the next company to develop the Cape Wind site. In addition, the site's relatively close shoreline location could provide it with additional cost advantages over leased areas beyond the 10-mile limit.

...maybe!

Last Friday the Cape Cod Times reported what seems to be the definitive word from Cape Wind:

“Cape Wind has confirmed to the Bureau of Ocean Energy Management that it has ceased development of its proposed offshore wind farm project in Nantucket Sound and has filed to terminate its offshore wind development lease that was issued in 2010,” according to a statement sent to the Times by Cape Wind vice president Dennis Duffy.

That's quite a turnaround from just a few months ago. According to BOEM's website, last June Cape Wind Associates wrote to the agency requesting a two-year suspension of its lease.

For that matter, barely two months ago, on September 26, BOEM formally affirmed its support for the offshore wind project.

Late last month the Koch-backed organization Alliance to Save Nantucket Sound filed an appeal of the BOEM decision, and that may have convinced Cape Wind to throw in the towel.

The appeal asks for the environmental review process to start from scratch due to a "the myriad of developments since the EIS was first issued in 2009."

Although it's not quite what the Alliance had in mind, among those developments is an emerging generation of high efficiency, low cost offshore wind turbines, new methods for anchoring turbine platforms, and new devices that can harvest wave energy without spoiling the view from shore. Any or all of these factors could combine to attract another developer to the Cape Wind site.

President Trump is known for opposing wind energy in general and offshore wind energy in particular, but under his watch the U.S. Department of Energy has continued to press forward with programs promoting U.S. wind development.

Anything could happen, so stay tuned.

Image: Simulation of one-mile view of Cape Wind turbines from boat via Cape Wind Associates.