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Change of Plans: Deepwater Swaps Offshore Wind Turbine Partners for Block Island Project

Updated: Deepwater Wind New England today announced it is partnering with European turbine supplier Alstom for its 30-MW Block Island wind farm off the coast of Rhode Island -- a change in turbine suppliers from its original plans.

Specifically, Alstom officially has been contracted to supply five of its 150 6-MW Haliade direct-drive turbines to Deepwater for its 30-MW wind farm about three miles off Block Island is hoped to be in service by 2015, putting it neck-and-neck with Cape Wind to be the nation's first operating offshore wind farm. Block Island project. All the blades are slated to be delivered in Europe in April 2014.

Siemens had been lined up as the project's turbine supplier with its own 6-MW wind turbines under a "preferred supplier agreement" inked in 2010, but that ended in 2012 without a final contract, explained Deepwater CEO Jeff Grybowski. (Siemens also is the supplier of record for the Cape Wind project, which had given the supplier it an early de-facto leadership status among the nascent U.S. offshore wind efforts.) Negotiations continued in 2013 with Siemens but Alstom also entered the picture, he said. Technically the deal with Alstom is two deals: one for turbines, another for a 15-year service agreement. And there's no equity involvement; "we're not looking for equity contributors right now, our current equity owners are able and committed," he said.

Deepwater's part of this new deal was "an initial multi-million-dollar payment" in December to begin manufacturing, which is why the company claimed last December it spent enough to qualify for the year-end-expiring 30 percent production tax credit. Adding up the previous expenditures for engineering, permitting and geotechnical work, and these turbine supply deals, "we believe we are far in excess" of the tax credit's 5 percent safe-harbor requirement, according to Grybowski.

With the turbine contract in hand, plus last month's staff recommendation from the Rhode Island Coastal Resources Management Council, Grybowski offered the following rough timeline for the Block Island project:

  • Permitting wrapping up over next month or so;
  • Turbines delivered spring 2015;
  • Foundations "likely to be a 2015 event," probably later in 2015 but before weather becomes a problem;
  • Turbines installed on foundations in the spring of 2016;
  • Commissioning over the summer of 2016;
  • Officially online by September-October 2016.

The foundation will be a four-legged jacket, a traditional offshore platform long used in the Gulf of Mexico, Grybowski noted. The company has a "short list" of possible designers/fabricators but hasn't signed any contracts yet. "A significant portion" of the foundation's work, as much as 40 percent in terms of steel weight, will be done in Rhode Island, he added. With no domestic U.S.-based vessel currently capable of deploying an offshore wind farm, Deepwater is hiring a European company's vessel to do the work. Paid by the day to sail 20 days to the U.S. and another 20 days back, "that's not cheap," Grybowski said -- but quickly added that's also a prime example of where domestic efforts could be focused to remove significant costs out of the offshore wind process: design a U.S. installation vessel specifically for offshore wind construction, or redesign one of the ships that already patrol the Gulf of Mexico to install and decommission offshore platforms. None of that will be ready for Block Island's needs, but "it's an interesting idea to talk about," he said.

Block Island is just the tip of the iceberg for Deepwater, though. Last summer it secured the first competitive lease of renewable energy in U.S. federal waters, an area off the coast of Rhode Island and Massachusetts with combined potential of nearly 3.4 GW of wind generation. The fruit of that will be the proposed 1-GW Deepwater Wind Energy Center with up to 200 turbines, plus interconnections between southeastern New England and Long Island, potentially costing as much as $5 billion. Grybowski said Deepwater isn't in a position to make turbine decisions about the DWEC project (and this Alstom contract is specific to the smaller Block Island project), but he did reveal the company will be responding by the end of March to the Long Island Power Authority's (LIPA) recent request-for-proposal for 280-MW of renewable energy -- and securing that would be key to staying on DWEC's proposed schedule of construction in 2017 and online by 2018, he said.

The other intriguing side of this Block Island deal is Alstom, which is actively involved in offshore wind in Europe -- the waters off of France, exploring floating offshore work from Europe and Japan, expanding partnerships for larger projects such as it's done with Renova in Brazil, according to Thibault Desclée de Maredsous, product management director for Alstom Wind Business, in a recent interview. In the U.S., though, Alstom has very little presence but is keen to position into the fledgling U.S. offshore wind sector, partnering with Dominion Virginia Power's offshore wind demo under the DoE pilot program. "We certainly want to grow our offshore business in the US market. We think there is strong potential," said an Alstom spokesperson responding to questions. Deepwater's Grybowski added that Alstom has committed to performing some assembly work in the state as well, "more than previously anticipated or talked about," including establishing a local service operation.

Lead image: Alstom's Haliade 150-6MW offshore wind turbine. Credit: Alstom

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