U.S. Approves First Offshore Wind Farm Near Cape Cod (Update2)

April 28 (Bloomberg) -- Interior Secretary Ken Salazar approved the first wind farm in U.S. waters, a project of more than $1 billion off the Massachusetts coast that was opposed by the late Senator Edward Kennedy.

Cape Wind, 130 wind-powered turbines to be placed in the shallow waters of Nantucket Sound, will have to be reconfigured to “reduce the visual impact” from land in order to go forward, Salazar said in a statement today. When completed the wind farm may generate enough power for more than 200,000 average U.S. homes, the Interior Department said.

Homeowners whose ocean views would be affected and local environmentalists spent $20 million over nine years to block the project. The wind farm also was opposed by Indian tribes and Kennedy, a Democrat who represented Massachusetts in Congress for 46 years until he died in August. The turbines would be visible from the Kennedy family compound in Hyannisport, though Salazar said steps have been taken to improve the view.

“I am convinced there is a path we can take forward that both honors our responsibility to protect the natural and cultural resources of Nantucket Sound, and at the same time meets the need to repower our economy with clean energy produced from wind power,” Salazar said today at the Massachusetts statehouse in Boston.

Legal Challenges

Cape Wind still needs approval from the Federal Aviation Administration because the turbines may interfere with tower-to- aircraft transmissions. A legal challenge to the wind farm is pending in the Massachusetts courts, and more lawsuits are likely, said Pat Parenteau, a professor at Vermont Law School in South Royalton who specializes in ocean and coastal resources.

The developer will be required to paint the metal turbines “off-white to reduce contrast with the sea and sky yet remain visible to birds,” Salazar said in the statement.

The department is also requiring that the developer take extra steps to ensure any archeological items in the seabed are protected before construction begins, Salazar said. Two Wampanoag Indian tribes say Cape Wind would disturb ancient burial grounds that are underwater.

The Obama administration said the wind farm will create “several hundred” construction jobs and amount to one of the nation’s largest single sources for the reduction of greenhouse- gas emissions blamed for climate change.

The project will cut carbon-dioxide pollution from traditional coal-fired power plants by 700,000 tons a year, the equivalent of removing 175,000 cars from the road annually, the Interior Department said.

‘Bittersweet’ on Environment

“It’s bittersweet from an environmental standpoint,” Parenteau said. “On one hand you are talking about a very scenic area rich with wildlife. On the other hand, the wind farm is a clean-energy resource that in one stroke will remove close to 1 million tons of carbon a year from the air.”

Democratic Senator John Kerry of Massachusetts said the decision means “jobs and clean energy” for his state.

The move also puts the U.S. in a better position to compete in the global clean-energy market, according to Katherine Kennedy, a lawyer with the Natural Resources Defense Council in New York, who isn’t related to the late senator.

“Europe is way ahead of the U.S. in terms of numbers of offshore wind projects,” she said. “Finally, the U.S. has entered the race and has a chance to catch up.”

Cape Wind would generate a maximum of 468 megawatts from turbines spread over 25 square miles of waters about 5 miles off mainland Cape Cod, in an area known as Horseshoe Shoal. The developer, Cape Wind Associates LLC, said on March 31 it would buy turbines from Siemens AG of Germany, which pledged to open a U.S. office in Boston.

Energy Management Inc.

Principals in Energy Management Inc., a closely held Boston energy company, put up $40 million in development costs for the project from proceeds on the sale of six natural-gas power plants in 2000, according to Cape Wind spokesman Mark Rodgers.

The project still faces formidable challenges, including the securing of financing and working out power contracts with the local utility, according to Ethan Zindler, head of North American research for Bloomberg New Energy Finance.

“After nine years, now comes the hard part,” said Zindler, who estimates the wind farm’s cost may exceed $2 billion, double the estimate cited by the administration.

National Grid Plc

National Grid Plc, a London-based company that delivers power to about 3.3 million customers in the U.S. Northeast, said in December it would negotiate to buy the electricity generated by the Cape Wind farm. The company said in a statement today the talks are going “very well.”

President Barack Obama has pledged to double renewable energy from the wind, sun and biodegradable waste in three years. The Energy Department says wind can supply 20 percent of U.S. power by 2030, up from 1.8 percent today.

The U.S. gets no power from offshore wind turbines. Northern Europe already has about 2,000 megawatts of offshore wind capacity, with a target to reach 40,000 megawatts by 2020, according to Walter Musial, head of offshore wind research at the National Renewable Energy Laboratory in Golden, Colorado.

About 6,300 megawatts of offshore wind are planned for the U.S. Outer Continental Shelf, the Great Lakes and British Columbia, according to Bloomberg New Energy Finance.

The decision on Cape Wind will be felt throughout the industry, said Jerome Guillet, who was head of energy for Brussels-based lender Dexia SA before starting a financial advisory firm in Paris.

Leaders of 3,200 Wampanoag Indians with roots in Cape Cod and Martha’s Vineyard say Cape Wind’s turbine blades, reaching 440 feet into the air, would desecrate the view of the sunrise that’s essential to their prayer ceremonies. A month before Kennedy died on Aug. 25, he wrote to Obama imploring him to halt action on the wind farm, which would be visible from the senator’s home.