On January 6, 2015, National Grid and NStar terminated power purchase agreements (PPAs) with Cape Wind, a proposed 468 MW offshore wind facility in the Nantucket Sound. The future of the project is uncertain, as Cape Wind has yet to secure financing to begin construction. Obtaining project financing will now be extremely difficult, if not impossible, with the loss of the PPAs.
Despite several projects under development, the United States lacks an operational offshore wind facility. The emergence of a robust offshore wind industry will require the success of early projects in order to grow industry experience, reduce project costs, and decrease financing risks. As the frontrunner, Cape Wind’s apparent demise is a blow to the near-term prospects for offshore wind.
Wall Street Journal: Mass. utilities back out of plan to buy power generated by Cape Wind
Boston Globe: Two utilities opt out of Cape Wind
This report is part of the Clean Tech & Sustainability Minute series. To view all featured Minutes, please click here.
Sussex Economic Advisors is now part of ScottMadden. We invite you to learn more about our expanded firm. Please use the Contact Us form to request additional information.