Cape Wind needs third PPA for remaining 22.5% of capacity

Completion of project finance still scheduled for Q2 2013

Cape Wind continues to seek a buyer for the remaining 22.5% of forecast capacity yet to be covered by a power purchase agreement (PPA). At the same time, it is seeking project finance for the majority of its forecast capacity, after recently winning regulatory approval for the second of its two power purchase agreements (PPAs).

Last month, the Massachusetts Department of Public Utilities (DPU) gave regulatory approval for a 15-year PPA signed by Cape Wind and utility NSTAR for 129MW, or about 27.5% of the controversial offshore wind project’s forecast output.

Another 50% will be sold through a 15-year PPA with National Grid. The Massachusetts Supreme Judicial Court upheld this agreement in December 2011 against a legal challenge. It was originally approved by the DPU in late 2010.

Both PPAs will see Cape Wind’s electricity sold at 18.7 US cents (14.4 € cents) per kilowatt hour, rising by 3.5% per year.

With both PPAs approved by regulators, Cape Wind is free to secure finance for the 77.5% of the project covered by the purchase deals, while it simultaneously pursues a third and final PPA.

Cape Wind spokesperson, Mark Rodgers, told Windpower Offshore that project finance is on track for completion during the second quarter of next year.

DPU approval of NSTAR’s PPA with Cape Wind comes as little surprise. In February, the DPU made NSTAR’s merger with Northeast Utilities conditional upon signing such a PPA. Such a condition was requested by Cape Wind’s developer, Energy Management.

In other news, Cape Wind’s preferred staging port, New Bedford, has won a construction permit from the US Environmental Protection Agency. Doubts surfaced recently about whether upgrades to New Bedford would be ready in time to serve Cape Wind during construction, and the developer met with Rhode Island governor Lincoln Chafee about the possibility of using Quonset or Providence instead.

Rodgers says Cape Wind is currently optimistic that New Bedford will be ready in time.

The bulk of geophysical and geotechnical work for the Cape Wind site has now been completed, he added. Next year, surveying will concentrate on areas outside of the wind farm’s immediate footprint, assessing factors such as which locations are suitable for anchoring.