Cape Wind is the leading offshore wind energy project in the United States. In 2001, more than 12 years ago, Jim Gordon, the project founder, started the process of promoting his vision of a building a 430 MWe (peak capacity) field of 130 massive (rotor diameter – 110 m, hub height – 80 m, nacelle weight – 100 tons) turbines. Gordon chose his location, a shallow water area in Nantucket Sound off of the coast of Cape Cod, because it was one of the best available areas in US waters for a wind installation. It has reasonably predictable winds, close proximity to a large concentration of electricity customers, and shallow enough water to minimize the cost of building tower foundations.
After a dozen years worth of marketing and sales pitches, Mr. Gordon has managed to obtain the necessary permits for his project and to receive commitments for approximately three quarters of the power that the facility might produce at weather-dependent times. As a direct result of Renewable Portfolio Standards (mandates) in the New England area where the power will be sold, the committed customers have agreed to pay $207 per megawatt-hour for the first year’s worth of power, with a guaranteed escalation of 3.5% per year for the first fifteen years worth of operation.
Aside: Since March of 2003 there have only been three brief spikes in New England when monthly wholesale electricity prices exceeded $100 per megawatt-hour. Monthly wholesale prices in New England have never exceeded $120 per megawatt-hour. End Aside.
Even with advantageous site attributes and monopoly utility customers that are willing to commit their captive rate payers to pay more than twice as much per unit of power as they have ever paid, Mr. Gordon’s vision remains stuck at the financing stage.
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