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Savings in offshore bulk purchases -- Americans team up

The developers of two of North America's most advanced offshore wind projects are teaming up in an effort to ensure the lowest possible cost for both. Cape Wind Associates, which is planning a 454 MW wind farm five miles off the Cape Cod shore in Massachusetts, and Nai Kun Wind Development Inc, which is developing a 700 MW project in Hecate Strait off Canada's northwest coast, have agreed to jointly procure foundations, towers, turbines and blades for both projects, as well as inter-turbine and undersea transmission cabling. The companies will also pool skills and experience on other aspects of development.

Both projects are at similar stages and both are shallow water wind farms, says Nai Kun president Michael Burns, so the companies will be looking at buying similar kinds of hardware. "We think the North American specifications are probably going to be a bit different and by giving the manufacturers a chance to get a longer run on all this stuff, we may just take advantage of some of the economies that they experience," he says. "Nobody has offered us a whole lot of discounts in the last couple of days. But it should work. If it doesn't, it sure won't cost us anymore."

While the two projects are at similar stages of development, they each face unique challenges. Cape Wind has run into stiff opposition from local residents, including prominent US politicians. Nai Kun, on the other hand, has the support of the Haida First Nation for its project on the northeast tip of the Queen Charlotte Islands. The traditional territory of the Haida encompasses the islands. "And there is no one who lives within sight of this project," adds Burns.


Nai Kun's challenge is breaking into a market controlled by British Columbia's government owned monopoly utility, BC Hydro. But Burns says the utility now imports around 11% of the province's electricity requirements and growing demand could help open its eyes to Nai Kun's potential.

"Certainly every intelligent viewer of the BC Hydro system sees a very nice fit for wind," he says. "It is a perfect system to integrate wind because of all the storage capacity." British Columbia has an 11,000 MW system dominated by large hydro generation. Wind power production and electricity demand in Canada tend to peak in winter, allowing hydro-based utilities to use wind to save more water in their reservoir systems.

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