PROVIDENCE – The state has selected Deepwater Wind to build a 100-turbine wind farm off the coast of Rhode Island that the developer says will not be visible from land, Gov. Donald L. Carcieri announced at a news conference this afternoon, where he was joined by Deepwater CEO Chris Brown.
State officials hope the project will eventually generate 15 percent of the state’s electricity.
Deepwater has committed to basing its corporate manufacturing headquarters at Quonset Point, where it expects to hire about 800 employees over the next few years, the company said.
Carcieri’s announcement that Deepwater Wind is the state’s “preferred developer” came this afternoon in North Kingstown, at a 1 o’clock news conference at the Port of Davisville in Quonset Business Park.
“This is an exciting day for us,” Carcieri declared. In an apparent reference to the state’s high unemployment rate, the governor added: “And Lord knows we need jobs right know, all we could get.”
“We’re excited about the Deepwater selection and what it means for Rhode Island,” said Saul Kaplan, executive director of the R.I. Economic Development Corporation and one of the five officials who vetted the wind-farm proposals.
Deepwater and the state are now set to enter into a 90-day negotiation period, during which details of the agreement for the wind farm will be hammered out. Andrew C. Dzykewicz, the governor’s chief energy adviser and the commissioner of the R.I. Office of Energy Resources, said he expects the Deepwater wind farm to be generating electricity at a cost of 7 to 9 cents per kilowatt-hour by 2012 if the regulatory process stays on track. (National Grid’s current rate base calls for a 12.5-cent rate.)
“We thought, early on, that the only way this is going to really happen is for the state to partner with a private developer,” Dzykewicz said. “I honestly couldn’t be more pleased.”
Kaplan called Deepwater’s proposal “a double win for the state.”
“Not only do we position ourselves as potentially being the first in the country to site an offshore wind farm and make a meaningful step toward energy independence, but we also win in the economic development area,” he said.
In addition to the 800 jobs Deepwater says the wind farm will create, the project sets the stage for “a significant additional number of jobs, as Deepwater aggressively looks to do additional projects up and down the Eastern Seaboard,” Kaplan said. The company, which also hopes to attract a turbine manufacturer to the area, says it has been in talks with a number of major players in the industry.
Deepwater Wind is a five-month-old firm backed by Newton, Mass.-based wind-energy developer First Wind; investment firm D.E. Shaw & Co.; and hedge fund Ospraie Management LLC. (First Wind was previously known as UPC Wind, but changed its name in May.) Deepwater also has acquired the offshore wind projects of another firm, Winergy Power LLC.
Deepwater has offices in Hoboken, N.J., New York and Houston. Its staff includes former employees of Winergy and First Wind, who have experience building onshore wind farms in other parts of the country.
Deepwater CEO Chris Brown said industrial wind power is poised to become a major business as the country looks for ways to deal with both climate change and the nation’s dependence on foreign sources of energy. “We’re addressing some of the nation’s highest priorities right now,” he said in an interview.
Studies have found that Northeast states could get a significant portion of their energy if they harnessed ocean winds. (READ MORE) And unlike natural gas and coal, two key sources of electricity generation in the region, wind has no commodity costs.
However, large-scale offshore wind farm projects have been stymied by technological constraints and aesthetic concerns – the best-known example being the long-running battle over Cape Wind in Massachusetts, which has dragged on since 2001. “We’ve created a solution, and that solution is around Deepwater technology,” Brown said.
“We don’t believe that communities need to choose between the environment – solving the greenhouse gas issue – and their view,” he continued. “Hence, what we’ve decided is, we want to be beyond the horizon.”
A precise location for the wind farm will not be decided until 2010, when scientists at the R.I. Coastal Resources Management Council and the University of Rhode Island complete the Ocean/Offshore Renewable Energy Special Area Management Plan (SAMP), a comprehensive set of detailed regulations that will lay out how the coast can be used. (READ MORE)
The SAMP process will streamline the eventual permitting process for the wind farm because creating the SAMP will force state and federal officials to tackle the huge assortment of state and federal regulations that may affect development along the Rhode Island coast. The researchers are also studying which areas would generate the largest amount of wind power.
Deepwater is proposing to build about 100 turbines, which could provide 385 megawatts of electricity – meeting Carcieri’s goal of obtain 15 percent of the state’s electricity energy from renewable sources. A state law mandates that the state must be getting 16 percent of its energy from renewables by 2019.
The wind farm would serve both Block Island and the mainland. Deepwater also has initiated talks with ISO New England, which runs the regional electricity grid, about ensuring the wind farm’s power can be used.
The company says it has patented a new technology of building drilling “jackets” – the scaffolding-like steel structure that holds up an oil platform – and using them to hold up wind turbines instead.
Brown said those jackets will provide a sturdier foundation than the monopile foundations currently favored for wind turbines. “This is the next generation of technology.”
The oil and gas industries have been using jackets since around 1945, Brown said, and there are more than 7,000 in the U.S. today. “We’re using the proven foundation system from this business and [giving it] a new application.”
The jackets serving as foundations for Deepwater’s turbines would be buried 60 to 100 feet deep in the ocean, and capable of withstanding extreme winds and waves.
Deepwater has licensed technology from OWEC Tower, a Norwegian manufacturer whose products already are in use at wind-turbine installations off the coast of Great Britain. The turbines would be about 558 feet high at their highest point, company renderings show.
Brown estimated the cost of the project as between $1.5 billion and $1.6 billion. No taxpayer dollars will be expended, he added. “It’s all private. We’re getting no public support. This is us, and our sources of capital.”
The project’s financing is secure despite the recent upheaval in the credit markets, Brown said. Deeprock has “bedrock” commitments from D.E. Shaw and Ospraie Management.
Kaplan added: “This is a situation where the taxpayers are not being asked to make the investment in the development, and the taxpayers will benefit when we get a new alternative energy source coming on stream.”
State officials are also enthusiastic about Deepwater’s plans to build its corporate manufacturing headquarters at Quonset Point.
Brown said the site had already been under consideration by Winergy and First Wind when they were contemplating projects. “It’s really set up for it,” he said. “It’s got a great infrastructure.”
Deepwater would use the Quonset facility to complete the turbine-manufacturing process. Some of the equipment would be bought from other vendors, but the final steps, as well as staging for the wind farm, would take place in North Kingstown.
“You’re building a new, ‘green collar’ industry where Rhode Island can benefit,” Brown said, adding that Deepwater is involved in projects in Massachusetts, New Jersey and off Long Island, as well.
Kaplan echoed his comments. “We’re industry building here,” he said. “It’s an important green industry that not only solves an energy issue that we’re dealing with, but creates really good, high-wage jobs for citizens.”
Europe is far ahead of the United States when it comes to wind technology, Brown said, partly because federal officials are still finalizing the rules that will govern offshore wind construction here. But, he said, “We can catch up.”
Deepwater was one of seven developers that submitted bids this May to build the wind farm. Four of those proposals were vetted extensively by a five-member panel appointed by Carcieri. (READ MORE)
Along with Kaplan and Dzykewicz, the other panel members were David Farmer, dean of the Graduate School of Oceanography at URI; Thomas F. Ahern, administrator of the Division of Public Utilities and Carriers; and Christopher Long, a policy aide to Carcieri.
Deepwater Wind is a wind-energy firm – backed by energy developer First Wind (formerly UPC Wind) of Newton, Mass., and New York investors D.E. Shaw & Co. LP and Ospraie Management LLC – that has acquired the offshore wind projects of Winergy Power LLC. Founded in the spring of 2008, Deepwater has offices in Hoboken, N.J., and Houston. For more information, visit www.dwwind.com.
Additional information about energy programs in Rhode Island is available from the R.I. Office of Energy Resources at www.energy.ri.gov.
Quonset Business Park in North Kingstown is managed by he Quonset Development Corporation, a special-purpose subsidiary of the R.I. Economic Development Corporation. Additional information is available at QuonsetPointRI.com.
Correction: Sept. 25, 2008
The original version of this article incorrectly stated that Deepwater Wind is headquartered in Ann Arbor, Mich. The company does not have offices there, although Chris Brown lives in Ann Arbor. The article has been corrected.
I would really like to know more details about these firms and the criteria used to choose this firm. They have no previous experience and have only been in business since Spring 2008. Let’s give e’m a billion that we don’t have. Even before the details of an agreement have been worked out. I hope that the open meetings law will allow PBN to cover those negotiations. Smells fishy.
Faith, if you read the story carefully you will see that there is no taxpayer money being spent here. It is all private investment. To quote:
Brown estimated the cost of the project as between $1.5 billion and $1.6 billion. No taxpayer dollars will be expended, he added. ?It?s all private. We?re getting no public support. This is us, and our sources of capital.?
The prospect of clean energy and 800+ new jobs is the best this native Rhode Islander has heard in quite some time!