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Problems mount for Cape Wind developer

The developer of Cape Wind terminated contracts to buy land and facilities in Falmouth, Mass., and Rhode Island, the latest sign that the $2.5 billion effort to become the nation’s first offshore wind farm might never produce a kilowatt of energy.

The developer, which for more than a decade has sought to launch a project to build more than 100 wind turbines in Nantucket Sound, was also suspended on Tuesday from participating in New England’s wholesale electricity markets by ISO New England, an independent company in Holyoke that operates the region’s power grid, according to The Boston Globe.

The failure to make payments to preserve those contracts and to maintain its position with ISO New England comes 2-1/2 weeks after the disclosure that National Grid and Northeast Utilities had terminated contracts to buy power from Cape Wind, deals deemed critical to the project’s financial viability.

In the latest ominous sign for the project, officials at Cape Wind on Thursday acknowledged that they stopped making payments on an agreement last July with the Rhode Island-based Quonset Development Corp. to lease 14 acres of land in North Kingstown, R.I., which was slated to become a staging and assembly area for the project.

“I can’t say why,” Cape Wind spokesman Mark Rodgers told the Globe, declining to comment further.

Ted Kresse, a spokesman for Quonset Development, said Cape Wind paid a $10,000 deposit for the land and a total of $19,200 in monthly payments since September to maintain the agreement, which was terminated last week. Cape Wind never took custody of the land.

An official at East Marine in Falmouth confirmed that Cape Wind also let expire a 2012 purchase-and-sale agreement for a 3-acre marina that would have been used to shuttle staff to and from the turbines.

Cape Wind, which has been battling lawsuits since it began seeking permits 14 years ago, also retains its $4.5 million agreement with the Massachusetts Clean Energy Center to lease some of its space at the newly built Marine Commerce Terminal in New Bedford.

As recently as last fall, Cape Wind officials were vowing that by the end of 2014 workers would start digging the trenches and laying the cables to erect 101 turbines. The spate of setbacks has been a blow to the project, which proponents have long viewed as a model to promote offshore wind farms across the country.

Earlier this month, officials at Cape Wind said they intend to press on and insisted their contracts with National Grid and Northeast Utilities remain in effect. They regard the utilities’ terminating the contracts as invalid.

Cape Wind has not addressed the future of the project in light of these new setbacks.

The utility companies said they terminated their contracts, which were signed in 2012, because Cape Wind had failed to meet a Dec. 31 deadline to obtain financing, start construction or put up financial collateral to extend the contract.

Environmental advocates are holding out hope that Cape Wind will find a way forward, but many said they recognize that the project seems increasingly unlikely to get built.

This week, the federal government will auction four offshore wind leases across 742,000 acres of sea south of Martha’s Vineyard. Those waters would be well beyond the view from shore and allow for the use of larger, more powerful turbines than Cape Wind has planned to build.