When Block Island's first foundation was installed in July, Deepwater Wind CEO Jeff Grybowski tweeted: "Steel is now in the water." Later that day his tweets became more detailed, that the 360-tonne foundation had been lifted with a Weeks 533 crane by a man named Emelio. Then he tweeted his thanks to the local carpenters' union alongside a photo of the men: "These guys did it."
The social media storm was telling. Launching the US's first offshore project has taken years of delicate planning in a political dance to build collaboration with stakeholders large and small, as well as the politicians and bureaucrats in Rhode Island state and Washington DC.
"It was a very deliberate planning process," says Grybowski. "We involved the community - defined quite broadly - from fishermen to local Native American tribes and environmentalists. That allowed us to learn more about the area and helped us find the best location."
The 30MW project's front-runner status is making waves. Attending a ceremony celebrating the start of construction were US Secretary of the Interior Sally Jewell, US Bureau of Ocean Energy Management Director Abigail Ross Hopper, the state's governor, Gina Raimondo, and a congressional delegation, and more than a hundred other elected officials, environmental leaders, federal and state regulators and local supporters.
Block Island's foundation work should be finished this autumn. In winter, Deepwater Wind will be working on the transmission, and on the submarine cable the following spring.
Site selection
The site was a smart choice. The project will provide electricity to more than 1,000 inhabitants of the 25-square-kilometre Block Island, which currently ferries in a million gallons (4.5 million litres) a year of pricey, dirty diesel. "We're the end of diesel for Block Island," says Grybowski. The project, to be completed late next year, also includes the island's first electricity cable to the mainland.
Deepwater's success stands in stark contrast to Cape Wind, the ambitious 468MW project in federal waters off Massachusetts that was litigated to death by well-funded opposition groups. Block Island will consist of only five turbines, 26 kilometres from the mainland and 5 kilometres from the island, whereas Cape Wind was aiming for 100-plus turbines 7.7 kilometres from Cape Cod.
Grybowski, 44, is a former corporate and regulatory lawyer who had no experience in the wind industry before he was hired to head Deepwater, based in Providence, in the state of Rhode Island. But he has political smarts and deep connections in the tiny state, America's least politically polarised. A native of Rhode Island (which is not an island), Grybowski served as chief of staff for Don Carcieri, state governor from 2003 to 2011.
Unique to Block Island is that the site was chosen in 2009 by the state - at the time the only one to offer planning zones for offshore wind. "It was the critical seed that led to our success," says Grybowski. The company then micro-sited the project where there was less fishing.
Critical support
When two lawsuits were filed, the state helped by backing the company. Both suits failed. "They were effectively challenging the very governmental agencies that had OK'd us," says Grybowski. A third suit was lodged in August. The plaintiffs - some of whom were involved in the previous suits - are challenging the project's 20-year power purchase agreement (PPA) with National Grid, saying that it should have been approved by federal rather than state regulators.
The project - with a cost of about $330 million - has attracted $290 million in debt funding from French banking group Societe Generale and Ohio-based KeyBank, plus some $70 million from DE Shaw & Co, the big hedge fund manager founded by billionaire David Shaw, which backs Deepwater as a company. DE Shaw is 20% owned by Google chairman Eric Schmidt. Mega-developer SunEdison also owns a stake.
The Block Island project will use Alstom Haliade 150-6MW turbines. Danish firm LM Wind Power is supplying the blades, and the towers will also be made in Europe. Previously, Siemens turbines were to be used. Grybowski declined to be specific about the decision to change to a turbine that has yet to be tested in a commercial application.
Deepwater announced its choice of Alstom turbines in February 2014, not long after GE made a bid to merge with the French company. Asked about the timing, Grybowski describes the GE merger as good news. "A US manufacturer investing in the offshore business is a positive," he says.
Block Island gives Deepwater a proof-of-concept project and a stepping stone to something larger. "People probably want to see something spinning before they go for a larger project," says Luke Lewandowski, an adviser at Make Consulting. Starting small also helps build up a supply chain. EMI's Cape Wind, in contrast, was seeking economies of scale. That project's barrage of litigation, suggests Lewandowski, may also have deflected criticism from Block Island.
Moving on
After Block Island, Deepwater will start on the 1GW Deepwater One project, 29 kilometres offshore in Rhode Island Sound. Geophysical and geotechnical surveying will start later this summer. Deepwater will be "seriously engaged in a PPA opportunity within the next 12 to 18 months," Grybowski predicts. Nothing can happen until there is a PPA, he adds. It will be built in phases of more than 100MW apiece, with construction likely to start no earlier than 2018. Deepwater One will deliver power west to Long Island, and north to the states of Rhode Island and Massachusetts.
The north-east US has a "perfect marriage" of great resource and large demand, says Grybowski. Conventional power plants will need to be retired, yet it is hard to build any sort of new power plants for crowded New York City or Long Island. "The exception to that is offshore wind," he says.
Principle Power's 30MW WindFloat Pacific project off Oregon, which Deepwater is co-developing, received a $47 million Department of Energy (DOE) grant in 2014. It also needs long-term revenue support, whether a PPA or an offshore wind renewable energy credit, like that of Maryland. WindFloat Pacific must be online in 2017 according to the DOE's timetable.
Might an extension be necessary? "There are a number of milestones - we are in close coordination with the DOE," says Grybowski. Market support, such as PPAs, is more important for offshore wind than policy support, he says.
America's offshore wind has struggled to get off the ground in contrast to Europe's. That makes Block Island especially notable. "The challenge (for offshore wind) is that it's new," concludes Grybowski. "That's why Block Island is so important. It's the first opportunity to show policymakers and utility executives that offshore wind can be permitted and financed in the US."
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