Cape Wind gains NStar PPA sign-off

The PUC made the merger of two utilities NStar and Northeast Utilities conditional on signing a PPA with the wind farm. At the time, Cape Wind Associates only had a deal for 50% of the offshore project's 468MW with National Grid.

When the NStar deal was announced in February, Cape Wind said completion of the PPA would potentially allow it to proceed with the construction of the project. Cape Wind has a deal with Siemens to supply its 3.6MW turbines to the project.

The contract is for 27.5% of Cape Wind's output, set at $0.187/kWh for 2013, rising 3.5% annually.

The deal is similar to the National Grid's PPA with Cape Wind for $0.187/kwh in 2013, rising by 3.5% annually for 15 years. National Grid then has the right to a one-time, ten-year extension of the contract.

Last year, Cape Wind called on the Massachusetts Department of Public Utilities to make NStar/Northeast buy the remaining 50% in order to fulfil its renewables obligations. At the time, there was a question over whether this was possible as NStar has tended to prefer onshore wind and has acquired PPAs in several projects.

The decision brings to an end the search for project financing.Last year, there was speculation that Cape Wind may tap into the bond market for financing.

PUC chairman Ann Berwick said: "It is clear that the Cape Wind facility offers significant benefits that are not currently available from other renewables. This contract supports the largest renewable energy project proposed in New England while providing protections to consumers against the volatility of fossil fuel prices."