Cape Wind Update – Interview with Jim Gordon

An supplement on offshore wind in North American Windpower had a fascinating interview with Jim Gordon, the tenacious developer of the Cape Wind project off the coast of Cape Cod. I wrote on this project in 2007, and a re-read will help you understand this post. The story continues, but may be nearing completion.

The 468 MW project has been granted all of its permits. I has faced 13 lawsuits. “Ask me how many we’ve won”, says Gordon. “All of them.” The opposition to the project came from some very wealthy people who have summer mansions in Hyannis, and who will be able to see turbines several miles away in Nantucket Sound. It is well documented that some of the opponents made their fortune in the fossil fuel business.

The project has a power 15 year purchase agreement to sell its output for half of the project, and Jim is confident they will get agreements to sell the rest. Power purchase agreements are essential to complete the financing of the project.

The interview included this exchange: “You’re seeking to be a big-time player in an industry that’s been locked up by fossil fuel interest for more than a century. Once offshore wind gets going, the technology could eliminate the need for a lot of fossil fuel plants. These guys are not likely to make room on their bench for a new player from another team entirely.”

Jim replied, “You’re exactly right. And these fossil fuel people have used their money and their influence – whether its to lobby for regulations to impede renewable energy or to support candidates that are more sympathetic to the entrenched interests of fossil fuels.” It seems they know who their opponents are.

The interview had an interesting discussion about the impact of the project of the prices that will be paid by electricity buyers as a result of the contract. The power purchase agreement is at 18.7 cents/kWh, which on the surface, seems high. But Jim Gordon points out an interesting thing, which incidentally, would also apply in Ontario. Mr. Gordon says, “It will reduce the clearing price of electricity in New England. That is an unassailable fact.”

Like Ontario, generators bid into the market. The system operator takes the stack of bids for an hour, ranks them from lowest to highest, and then accepts the output from all the generators who offer to produce for less than the price offered by the last generator bid that provides sufficient power to meet the demand for that hour. All of the bidders whose price is below this market clearing price are paid the same rate. If Cape wind is producing 1% of the New England demand, then the price accepted, and paid to all, will be lower in the bid stack, because they can go lower in the stack to find the market clearing price.

Why isn’t the media writing about this? “We explain this to reporters, and its very complicated. Their eyes start to glaze over. So they just take the kilowatt-hour price and compare it against the kilowatt-hour price printed on your home electric bill.” Hmmm…. I’ve seen that type of reporting in Ontario too, and worse, heard that kind of “logic” used by some politicians too. Plus ca change, plus c’est la meme chose.

The project looks imminent, and could begin construction next year. And it could be the first offshore wind project operating in North America. It takes pioneers like Jim Gordon to face down the vested interests for the greater good. I visited Cape Cod with my aunt and uncle when I was 15 years old, 37 years ago. I might just have to make a return trip once this project is completed.

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