Cape Wind
Cape Wind was a proposed offshore wind farm project comprising 130 turbines with a total nameplate capacity of 468 megawatts, planned for Horseshoe Shoal in Nantucket Sound approximately 5.6 miles offshore from Cape Cod, Massachusetts, and intended to generate up to 75 percent of the region's electricity demand.[1][2][3] First proposed in November 2001 by Cape Wind Associates, the initiative aimed to establish the United States' inaugural large-scale offshore wind installation but encountered protracted regulatory approvals, escalating construction costs, and persistent legal challenges that extended over 16 years.[4][5] Opposition arose primarily from affluent coastal residents, commercial fishermen, aviation interests, and Native American tribes, who cited concerns including visual alterations to the seascape, potential disruptions to bird migration and marine life, navigational hazards for boating and aviation, and interference with historic sightlines from sites like the Kennedy compound in Hyannis Port.[6][7][4] Despite federal approvals from agencies including the Minerals Management Service in 2010 and initial power purchase agreements with utilities, the project faltered amid financial inviability, with contracts voided in 2015 after developers missed construction deadlines and failed to secure firm financing amid rising subsidy-dependent costs exceeding 20 cents per kilowatt-hour.[8][5][9] Cape Wind's termination in December 2017 underscored systemic barriers to offshore wind deployment in the U.S., including local not-in-my-backyard resistance prioritizing aesthetic and recreational values over broader energy reliability and intermittency trade-offs inherent to wind generation.[10][11][12]Project Origins and Specifications
Initial Proposal and Development
Cape Wind Associates, LLC, led by James S. Gordon of Energy Management Inc., submitted an initial application in November 2001 to the U.S. Army Corps of Engineers for a permit to construct and operate an offshore wind facility on Horseshoe Shoal in Nantucket Sound, approximately 5 to 6 miles off the coast of Cape Cod, Massachusetts.[13][14] The proposal envisioned up to 170 wind turbine generators in a grid array across 24 square miles of shallow federal waters (average depth 36 feet), aiming to generate over 1,000 megawatts of capacity to supply electricity to New England utilities.[15][16] Energy Management Inc., a Boston-based firm founded by Gordon in 1975 specializing in independent power production, formed Cape Wind Associates specifically for the project, drawing on its experience developing thermal power plants.[17] The site's selection leveraged Nantucket Sound's high wind speeds (averaging 19.7 mph at hub height) and proximity to load centers, including Cape Cod, Martha's Vineyard, and Nantucket, where summer peak demand reaches 1,200 megawatts.[14] Early development involved preliminary engineering studies, wind resource assessments, and coordination with the Corps for environmental impact scoping under the National Environmental Policy Act.[13] In response to initial feedback on potential navigational hazards and visual aesthetics, Cape Wind revised the design in January 2003, reducing the turbine count to 130 units with a targeted capacity of 420 megawatts—enough to power about three-quarters of Cape Cod's electricity needs—while maintaining the core Horseshoe Shoal footprint.[15][18] This adjustment aimed to minimize interference with shipping channels and bird migration paths, setting the stage for formal environmental reviews and state-level consultations.[13] Gordon positioned the project as a pioneering step toward diversifying Massachusetts' energy mix, which at the time relied heavily on imported natural gas and oil.[17]Technical Design and Intended Capacity
The Cape Wind Energy Project envisioned deploying up to 130 fixed-bottom wind turbine generators (WTGs) in a grid array covering approximately 25 square nautical miles of Horseshoe Shoal in Nantucket Sound, Massachusetts.[1] Each WTG was specified as a Siemens SWT-3.6-107 Version 3 turbine with a hub height of 260 feet and a rotor diameter of 107 meters, achieving a maximum blade tip height of 440 feet above mean sea level.[1] [19] The turbines were designed for monopile foundations, consisting of steel cylinders driven approximately 85 feet into the seabed to support the structures in water depths ranging from 9 to 46 feet.[1] The array layout featured parallel rows with spacing of about 0.6 nautical miles between rows and 0.4 nautical miles between turbines within rows, optimized to minimize wake effects and maximize energy capture from prevailing winds.[20] Electrical output was engineered for a total nameplate capacity of 468 MW, with the configuration based on a design wind speed of at least 30 mph to achieve peak generation.[13] [1] Accounting for array efficiency and environmental factors, the project anticipated an average output of 174 MW, sufficient to meet up to 75% of peak electricity demand for Cape Cod and the Islands.[1] Power transmission involved submarine cables connecting two onshore substations in Barnstable and Yarmouth on Cape Cod, integrating with the regional grid.[19]Regulatory Pursuit
State and Local Approvals
The Massachusetts Energy Facilities Siting Board (EFSB), empowered under state law to issue comprehensive permits for energy projects that supersede local zoning and permitting requirements, conducted an extensive review of Cape Wind's proposal beginning in 2002.[21] This process addressed onshore transmission cables landing in Barnstable and Yarmouth, where local conservation commissions and town boards had initially denied permits citing wetland impacts and visual concerns.[21] On May 27, 2009, the EFSB unanimously approved Cape Wind's application in a 7-0 vote, granting a Certificate of Environmental Impact and Conditions along with a comprehensive permit that incorporated and overrode the denied local approvals.[22][21] The EFSB's decision followed public hearings, technical assessments, and mitigation commitments from Cape Wind, including cable burial depths and environmental monitoring, determining that the project met state criteria for need, reliability, and minimal adverse effects.[21] Local opponents, including the Alliance to Protect Nantucket Sound, challenged the ruling in Massachusetts Superior Court, arguing insufficient good-faith efforts for local Development of Regional Impact (DRI) reviews under the Cape Cod Commission Act.[23] On August 31, 2010, the Massachusetts Supreme Judicial Court affirmed the EFSB's authority and findings in a 4-2 decision, upholding all state and local permits while dismissing claims of procedural irregularities.[24] Subsequent EFSB actions included a 2014 reaffirmation of transmission line approvals amid ongoing delays, but by April 2016, the board under Governor Charlie Baker denied Cape Wind's request to extend its construction commencement deadline, citing failure to secure financing and commence work within the original terms.[25] This effectively lapsed the state permits without revocation, as the project had not advanced to construction despite initial clearances.[26]Federal Approvals and Reviews
The federal regulatory framework for the Cape Wind project encompassed approvals from multiple agencies, including the Bureau of Ocean Energy Management (BOEM), the U.S. Army Corps of Engineers (USACE), the Federal Aviation Administration (FAA), and the Environmental Protection Agency (EPA), coordinated under the Outer Continental Shelf Lands Act, Rivers and Harbors Act, Clean Air Act, and National Environmental Policy Act (NEPA). BOEM served as the lead agency for offshore renewable energy leasing and operations on the Outer Continental Shelf, conducting environmental reviews and issuing key authorizations after evaluating site assessment plans, construction and operations plans, and facility design reports.[27][28] Cape Wind submitted its initial federal permit application to the USACE in November 2001 under Section 10 of the Rivers and Harbors Act for structures in navigable waters. In August 2002, the USACE issued a permit allowing construction of a meteorological tower to collect wind data, which was deployed but later removed amid legal disputes. The full project permit from the USACE, authorizing turbine foundations, cables, and substations, was granted on January 5, 2011, following extensive NEPA compliance and public comment periods exceeding nine years.[29][27][30] BOEM issued a commercial lease for 46 square miles in Nantucket Sound on October 15, 2010, after approving the project's Site Assessment Plan in 2009 and completing a Final Environmental Impact Statement (EIS) that assessed alternatives, avian impacts, and fisheries effects. On April 18, 2011, BOEM approved the Construction and Operations Plan (COP) via a Record of Decision, determining that the project would not cause undue harm to the environment with required mitigations such as bird monitoring. Subsequent BOEM actions included approval of the Avian and Bat Monitoring Plan on November 20, 2012, and revisions to the COP on September 9, 2014, incorporating updated turbine models and safety measures.[27][31][32] The EPA issued a proposed Outer Continental Shelf Air Permit on June 3, 2010, evaluating emissions from construction vessels and operations, with final approval following public hearings and confirmation that impacts would remain below National Ambient Air Quality Standards. The FAA determined no hazard to air navigation from turbines in May 2011 but later faced a federal court revocation in 2014 over insufficient marking and lighting determinations for aviation safety. In response to a 2016 U.S. Court of Appeals remand concerning cumulative visual and historic impacts on the Wampanoag Tribe's viewsheds, BOEM prepared a Draft Supplemental EIS in March 2017 and a Final Supplemental EIS in July 2017, though these reviews concluded after Cape Wind's lease surrender in November 2017.[33][28][34]Legal Challenges and Delays
The Cape Wind project faced extensive litigation from inception in 2001, with opponents including the Alliance to Protect Nantucket Sound—backed by figures such as U.S. Senator Edward Kennedy and billionaire William Koch—challenging permits on environmental, navigational, jurisdictional, and cultural grounds, resulting in over a decade of delays despite prevailing in most cases.[8][35] Early federal challenges targeted U.S. Army Corps of Engineers permits for a meteorological data tower, with the Alliance arguing inadequate National Environmental Policy Act (NEPA) review and improper federal jurisdiction over Nantucket Sound waters; the U.S. District Court granted summary judgment for the Corps in 2004, upheld by the First Circuit Court of Appeals in 2005, which affirmed federal authority under the Outer Continental Shelf Lands Act and NEPA compliance, while the U.S. Supreme Court denied certiorari.[35] In Ten Taxpayers Citizens Group v. Cape Wind Associates (2004), the First Circuit similarly rejected state permitting claims for the tower, solidifying federal primacy but postponing construction through appeals until 2005.[35] State-level disputes intensified when the Cape Cod Commission rejected transmission cable permits in 2007, citing local impacts, prompting Cape Wind to seek a "super permit" from the Massachusetts Energy Facilities Siting Board (EFSB); the EFSB approved it in May 2009, overruling the Commission, a decision upheld by the Massachusetts Supreme Judicial Court in 2011 against Alliance appeals alleging procedural flaws and insufficient local input.[36][37] Aviation safety claims led to repeated challenges of Federal Aviation Administration (FAA) "no hazard" determinations for turbine interference with radar; the Town of Barnstable's 2011 suit succeeded initially in the D.C. Circuit, remanding for further analysis due to inadequate FAA reasoning, but the FAA reissued the determination, affirmed by the D.C. Circuit in January 2014 after finding sufficient evidence against navigational risks.[38][35] Further suits invoked cultural harms, with Wampanoag tribes filing in 2011 to block construction over alleged desecration of sacred Horseshoe Shoal sites, alongside NEPA-based environmental claims on birds, fisheries, and viewsheds; while federal courts dismissed or rejected most—such as a 2014 U.S. District Court ruling upholding Interior Department approvals—the cumulative litigation, spanning at least 20 major cases, eroded financing and extended timelines beyond 16 years, contributing to the project's 2017 termination amid unresolved power purchase agreements.[35][8][39]Financial Framework
Power Purchase Agreements
Cape Wind Associates secured two primary power purchase agreements (PPAs) with Massachusetts utilities to sell the project's expected output of approximately 1,500 GWh annually from its planned 130-turbine array.[40] The first PPA, executed in November 2005 with National Grid (operating as Massachusetts Electric Company and Nantucket Electric Company), committed the utility to purchasing 50% of the facility's energy, capacity, and renewable energy certificates (RECs) over a 15-year term, equating to about 750 GWh per year or roughly 3.5% of National Grid's regional load.[40] [41] This agreement stipulated an initial price of 18.7 cents per kWh in the first year, with annual escalations of 3.5%, reflecting adjustments from an original 20.7 cents/kWh rate following regulatory settlements and appeals.[42] [43] The Massachusetts Department of Public Utilities (DPU) approved the National Grid PPA in November 2010, determining it aligned with state renewable portfolio standard (RPS) goals despite above-market pricing, as the contracts facilitated RPS compliance at a net cost deemed reasonable after accounting for REC values and avoided fossil fuel expenses.[44] Opponents, including the Alliance to Protect Nantucket Sound, challenged the approval in court, arguing procedural flaws and excessive ratepayer burdens, but the Massachusetts Supreme Judicial Court unanimously upheld the DPU's decision in December 2011, affirming the agreements' consistency with statutory mandates for long-term renewable contracts.[37] [45] A second PPA with NSTAR Electric Company (later acquired by Northeast Utilities) mirrored the National Grid deal, covering the remaining 50% of output under identical 15-year terms and pricing starting at 18.7 cents/kWh with 3.5% annual increases, approved by the DPU in November 2012 after similar reviews emphasizing RPS benefits over short-term cost premiums.[46] [47] These agreements were pivotal for project financing, as they provided revenue certainty, though critics highlighted the escalating costs—potentially reaching over 25 cents/kWh by mid-term—exceeding wholesale market rates and imposing surcharges on ratepayers estimated at $200–300 million over the contract life.[43] Delays from ongoing litigation and permitting stalled construction milestones outlined in the PPAs, prompting National Grid and NSTAR to notify Cape Wind of intent to terminate in January 2015 for failure to achieve financial close by December 31, 2014.[48] [49] Cape Wind contested the terminations, attributing delays to "unprecedented" legal opposition, but the utilities proceeded with cancellation, citing contractual force majeure clauses and the project's inability to deliver power within the viable economic window, ultimately contributing to the venture's collapse in December 2017.[48]Cost Estimates, Financing, and Economic Analysis
The Cape Wind project underwent significant cost escalations from its inception. Initial estimates in 2002 projected a total cost of approximately $600 million for 170 turbines.[14] By the mid-2000s, revised figures approached $1 billion, reflecting expanded scope and early permitting delays.[50] The 2012 Department of Energy Environmental Impact Statement (EIS) cited a total project cost of $2.5 billion for up to 130 turbines with 468 MW capacity, including $700 million in construction and installation, of which 20% ($140 million) was allocated to labor and 80% ($560 million) to materials and services.[13] By 2010 filings, costs had risen to $2.6 billion, or over $5,500 per kW installed, driven by prolonged regulatory hurdles, supply chain inflation, and turbine technology upgrades.[51] Financing relied primarily on private investment and power purchase agreements (PPAs), with federal loan guarantees sought but not secured. Cape Wind Associates pursued a U.S. Department of Energy loan for construction startup costs, as outlined in the 2012 EIS, but delays eroded investor confidence and precluded approval.[13] Key PPAs included a 2010 agreement with National Grid for 77.5% of output at an initial 18.7 cents per kWh, escalating 3.5% annually over 15 years, and a separate deal with NStar (later Eversource) starting at approximately 20.7 cents per kWh.[13][52] These contracts, approved by Massachusetts regulators in 2012 despite projected ratepayer impacts of up to 23.5 cents per kWh for NStar portions, collapsed in 2015 when both utilities terminated due to escalating costs exceeding market alternatives like natural gas.[46][53] Economic analyses highlighted the project's marginal viability and high consumer burdens. The 2012 EIS estimated a levelized cost of energy (LCOE) of 18-22 cents per kWh, though an appendix adjusted to 12 cents per kWh in 2002 dollars based on optimistic capacity factors.[13] Independent assessments pegged LCOE above 24 cents per kWh, far exceeding New England wholesale rates (often below 5 cents per kWh post-2010 shale gas boom).[54] Proponents projected construction-phase benefits including 371-1,000 jobs, $50 million in wages across Massachusetts and Rhode Island, and $266-430 million in economic output, plus ongoing operations supporting 50 jobs and $16 million annual O&M spending.[13] Critics countered that net impacts included $1.59 monthly residential bill increases, potential $1.35 billion in property value losses from visual impacts, and decommissioning costs of $64-126 million, rendering the project uncompetitive without subsidies.[55][56][12] The EIS deemed it feasible via PPAs and tax incentives, but real-world financing failures underscored causal risks from cost overruns and market shifts.[13]| Cost Component | Initial Estimate (2002) | EIS Estimate (2012) | Final Projection (2010s) |
|---|---|---|---|
| Total Capital Cost | ~$600 million | $2.5 billion | $2.6 billion[14][13][51] |
| Per kW Installed | N/A | ~$5,300 | >$5,500[51] |
| PPA Initial Price | N/A | 18.7 ¢/kWh | 18.7-20.7 ¢/kWh, +3.5%/yr[13][52] |
| LCOE Range | N/A | 12-22 ¢/kWh | >24 ¢/kWh[13][54] |