There were fresh signs on Monday that the Cape Wind offshore wind power plant in Nantucket Sound in Massachusetts will become a reality: The developer and Siemens finalized a deal under which Siemens will supply turbines for the project, and Siemens said it would likely become an equity investor.
Cape Wind and Siemens said they signed a contract for 130 3.6-megawatt turbines, adding up to 468 MW of generating capacity, along with an offshore electric service platform and a 15-year service agreement once the plant begins operating.
Perhaps just as significantly, Siemens Energy CEO Randy Zwirn told Bloomberg, “Siemens will most likely be an investor in the project.” The potential equity stake could bring Cape Wind $100 million to help finance the $2.6 billion project – badly needed cash.
“This is really the first offshore wind project of any significance anywhere in the U.S.,” Zwirn said. “As the leading supplier of offshore wind turbines in the world, we obviously have an interest to see that market potential to be developed.”
The Danish pension fund PensionDanmark earlier this year committed $200 million toward the project, but it was conditional on Cape Wind showing more progress toward meeting its financing needs before the end of this year.
So an investment from Siemens would help a lot, as will qualifying for a 30 percent investment tax credit, as seems likely now. The project is also looking to the U.S. Department of Energy for a loan guarantee for a portion of the cost.
While the project has run into opposition from some environmentalists and coastal residents, most Massachusetts politicians, including Gov. Deval Patrick, are pushing hard for it. Patrick called Monday’s announcement “a significant milestone.” Here’s why: Pols like the prospect of new jobs, and the mammoth engineering, construction and operations/maintenance project promises a lot of them. Siemens said that its work on Cape Wind would be managed from the Boston office it opened in 2010.
Manufacturing on the electric service platform – which will interconnect the 130 turbines and provide electrical protection and voltage step-up transformers – is being subcontracted to the Maine company Cianbro, which put a value of $100 million on its part the deal. As for the service part of the Siemens deal, Siemens said it “will hire locally to fill the majority of its … positions at Cape Wind’s future service headquarters on Falmouth Harbor on Cape Cod.”