United States

United States

Massachussetts signs off Cape Wind PPA with National Grid

UNITED STATES: State regulators have approved a power purchase agreement (PPA) between Cape Wind and utility National Grid, removing a major hurdle for the offshore project.

Cape Wind's meteological tower: the first, and only, US offshore construction
Cape Wind's meteological tower: the first, and only, US offshore construction

The Massachusetts Departments of Public Utilities (DPU) approved a 15-year contract between the parties, covering half the output of the 468MW project.

The DPU has, however, rejected a second PPA between Cape Wind and a utility to be determined, for the remainder of the development's output.

The price for the first PPA is 18.7 cents per kwh in 2013, rising by 3.5% annually for 15 years. National Grid then has a right to a one-time, ten-year extension of the contract.

The price can be adjusted up and down based on various contingencies, such as if Cape Wind is unable to secure certain federal subsidies.

The DPU said the contract is cost-effective, arguing that its benefits far exceed its costs.
DPU chair Ann Berwick said: "It is abundantly clear that the Cape Wind facility offers significant benefits that are not currently available from any other renewable resource."

The DPU said no other renewable energy sources in the region can match Cape Wind’s size, capacity factor, advanced permitting stage and proximity to a large electric load.

The second PPA did not name a contracting utility, and the DPU said any review of a future contract on the same terms could be expedited.

The judgement ends a five-month review of Cape Wind, following on the heels of the wind farm winning federal approval
Since then the Federal Aviation Administration has made and upheld a no-hazard ruling in favour of the project, and Cape Wind signed a 28-year lease with the federal government.

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