Cape Wind Teams up with Canadian Wind Developer

Charting new territory for the U.S. wind power industry, the project developers behind the Cape Wind offshore project announced a formal collaboration with a Canadian developer pursuing their own wind project off the coast of British Columbia. Cape Wind’s proposed 420 MW project off the coast of Massachusetts coupled with the Nai Kun Wind Development’s 700 MW wind farm comprise well over a gigawatt of new offshore wind energy potential — the largest such partnership in North America. With Cape Wind weathering a long and tough battle over the approval of their project, speculation arose that the new partnership was partially motivated by financial concerns.

In effect, it’s partly true. The arrangement should afford the two companies a more effective collective bargaining position for the high up-front cost of the offshore wind equipment. It won’t, however, change the financial and investment independence of the two projects, according to Cape Wind spokesman Mark Rodgers. “There are no implications on financing and ownership,” Rodgers said. “We’re two offshore developers that have a lot in common. We want to work together, compare notes, and hopefully work together to get quotes for equipment and bulk purchasing. We’re hoping this arrangement will help to reduce costs for both projects.” Cape Wind was the first project developer to propose a commercial-scale offshore wind farm for U.S. waters. The developers have weathered a long and bumpy pre-construction gauntlet consisting of extensive, costly, and time-intensive reviews. All the while, the project has faced fierce opposition from numerous interests including environmentalists concerned about the project’s effect on local wildlife and others concerned about the project’s possible effect on tourism or property values. Rodgers assured that despite these challenges Cape Wind remains independent and that the company looks forward to a final construction approval, which could have positive implications for future offshore projects throughout the U.S. “We have not had any offshore wind development here yet,” Rodgers said. “The sooner these get built and come online, the more they will help spur a North American market for wind. We have a shared interest in getting that to happen.” Both projects are at similar stages, in terms of permits and wind studies. “We expect both projects would be built in roughly the same time frame and this collaboration agreement will facilitate the development and procurement processes,” said Michael C. Burns, President of Nai Kun Wind Development. Cape Wind is slightly further along in the process, but the apples and oranges nature of differing U.S. and Canadian wind power construction processes don’t allow an exact comparison, Rodgers said. The collaboration agreement initially provides for joint procurement of foundations, towers, turbines and blades for both projects. Cape Wind and U.S. wind turbine giant GE Energy previously signed a letter of intent expressing their shared interests in GE energy providing their 3.6 MW offshore turbines for the project, but this is not a final or binding contract. Rodgers doesn’t expect their partnership with Nai Kun Wind Development to alter their interest in GE turbines. While collaborative bulk purchasing of turbines could be part of this arrangement, even if the two developers chose different machines, Rodgers said there are many other areas ripe for cooperation including inter-turbine cabling and under-sea transmission cabling. The companies will also pool skills and experience on other aspects of the projects, such as maintenance regimes and marine service vessels. “We feel certain the two projects will compliment one another,” said Jim Gordon, President of Cape Wind. “The joint procurement effort and the pooling of knowledge and experience should assure the lowest possible prices for both projects and accelerate this important new renewable energy source.”
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