Deepwater Says Offshore Wind Farm Will Meet Tax Credit Threshold

Deepwater Wind LLC, the renewable- energy developer planning wind projects off the U.S. Atlantic Coast, expects its Block Island Wind Farm to qualify for a federal tax credit that expires this year.

The company has spent more than a 5 percent threshold on the 30-megawatt project off the coast of Rhode Island, Chief Executive Officer Jeff Grybowski said yesterday in an interview. That will let the $300 million wind farm qualify for the federal investment tax credit.

“We believe we’ve qualified for the tax credit,” he said. “We will not only meet that 5 percent threshold, we’re confident we’ll exceed it by a good margin.” The project is on track to begin offshore construction in 2015, Grybowski said.

Renewable-energy projects must begin construction, or spend at least 5 percent of the anticipated budget, before Jan. 1 to earn the credit, which reimburses developers as much as 30 percent of costs.

The company, based in Providence, Rhode Island, expects the Block Island project to be the first of several it’s planning in deeper waters where there’s stronger wind, Grybowski said.

“It’s important to demonstrate that we can permit and build a project in the U.S.” before seeking “multibillion- dollar financings for much larger projects,” he said.

Deepwater won a July auction to develop offshore wind farms in two blocks of U.S. federal waters off Massachusetts and Rhode Island.

Deepwater is planning a 1 gigawatt wind farm about 15 miles (24 kilometers) south of Martha’s Vineyard, Massachusetts, that may cost as much as $5 billion, with construction starting in 2017. The company has received backing from the hedge fund D.E. Shaw & Co.

Copyright 2013 Bloomberg

Lead image: Offshore wind via Shutterstock

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Jennifer Runyon has been studying and reporting about the world's transition to clean energy since 2007. As editor of the world's largest renewable energy publication, Renewable Energy World, she observed, interviewed experts about, and reported on major clean energy milestones including Germany's explosive growth of solar PV, the formation and development of the U.S. onshore wind industry, the U.K. offshore wind boom, China's solar manufacturing dominance, the rise of energy storage, the changing landscape for utilities and grid operators and much, much, more. Today, in addition to managing content on Renewable Energy World and POWERGRID International, she also serves as the conference advisory committee chair for DISTRIBUTECH, a globally recognized conference for the transmission and distribution industry. You can reach her at Jennifer.Runyon@ClarionEvents.com

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