The Week In Green Energy: Offshore In the USA�

by Terrence Murray - May 2, 2010

Week of April 26 – to – April 30, 2010

It took nine long years and multiple setbacks fueled by passionate opposition from local residents for Boston-based developer Cape Wind to clinch the holy grail: a federal permit to construct the first U.S. offshore wind-generated power plant.

Interior Secretary Ken Salazar, making the announcement in Boston, conceded that his decision would not please everyone on nearby Cape Cod, where residents will have the best view of the 130 Siemens offshore wind turbines to be deployed across the Nantucket Sound.

But Salazar, a big booster of offshore wind, said it was important to look at the big picture. Offshore wind power is just the latest technology being deployed on Cape Cod, he said. �Nantucket Sound has long been a working landscape. It is a place for fishing and boating. It is an artery for commerce and industry. It hosts bridges, cell towers and communication cables that support modern society.�

Salazar vowed, that going forward, the permitting process for other offshore wind projects � (there are a couple proposed off the Delaware coast and even one , off Evanston, Ill.) � would be far shorter.

While the U.S. is just beginning to uncap its offshore potential, Europe is years ahead. Denmark installed its first offshore wind turbines more than two decades ago, and the UK is set to invest some �75 billion ($119 billion) to develop a string of utility-scale wind farms off its rugged coast.

Cape Wind developers face several other challenges before their turbines can even start pumping electricity onto the grid, expected to happen by 2012. First, they have to secure a moneymaking long-term power purchase agreement. Negotiations are ongoing with potential off taker National Grid. Once they’ve secured that contract, they then will have to convince project finance banks to back this pioneering renewable energy project, which will cost an estimated $1 billion to build. What’s likely to emerge is a financing package comprised of bank debt and some sort of state and federal support in the form of loan guarantees or 1603 direct cash grants (if they are extended).

This week we were reminded why as a society we need to clean up our energy consumption. As Salazar announced the approval of the Cape Wind project, residents along the Gulf of Mexico were bracing for what . Crude oil gushing from a deep-sea well drilled by a now sunken British Petroleum contracted platform was heading toward the Louisiana coast.

The White House on Saturday morning said President Obama would travel to the Gulf Coast. As state and federal officials began to assess the magnitude of the oil slick, finger pointing began, with the government blaming .

In Washington, a week after theatrically walking away from the climate change and energy bill he’d co-sponsored with Sens. John Kerry (D-Mass.) and Joe Lieberman (I-Conn.), Sen. Lindsey Graham (R-S.C.) said he could still be convinced to back the bill again. Graham had said he would no longer participate in the climate negotiations because Democrats would give priority to immigration reform. Word around Washington, though, is that Graham will return to the fold.

Democrats do not have the votes to pass immigration or climate change legislation, but the climate and energy legislation is much farther along and more likely to pass than a hurried and contentious immigration reform bill.

With the passage of Arizona�s tough immigration law, the White House and Senate Majority Leader Harry Reid (D-Nev.) opted to show they were serious about immigration reform, at least for now…. But in the end they�re likely to go with the “winning horse,” which in this case is climate change.

�I care equally about immigration and climate change,� Graham told the Washington Post�s Ezra Klein. �But if you stack them together this year, you�ll compromise climate and energy. You�ll compromise my ability to get votes on climate change.�

This week we learned that NewWorld Capital Group, a cleantech-focused private equity firm launched last fall, was close to announcing a couple of inaugural investments in two energy efficiency companies. Terms of the deal were still being negotiated but the combined investments are expected to be north of $50 million. Carter Bales, who back in the �90s launched McKinsey and Company�s environmental practice, helped start NewWorld.

VC & PE Watch

Solar Power Partners, a developer and operator of solar-powered facilities, has raised $115 million in new financing from Minneapolis-based U.S. Bank and WestLB AG, the German bank.

Thin-film PV maker First Solar has acquired San Francisco-based NextLight Renewable Power, a developer of utility-scale solar PV power projects for $285 million. New Jersey PE firm Energy Capital Partners backs NextLight.

Joule Biotechnologies, a Cambridge, Mass.-based ethanol developer, has closed $30 million in a second round of funding from a group of undisclosed institutional and private investors.

Total, the French oil and gas major, has invested an undisclosed sum in ethanol maker Coskata Inc., based in Warrenville, Ill.

New York-based cleantech PE firm NewWorld Capital Group is close to investing up to $50 million in two energy efficiency companies.

Rambling

Here at Green Energy Reporter, we’ve not shied away from highlighting �and in some cases praising�investments in renewable energy and greentech by oil majors. Chevron lead our March Top Ten Players in Green Energy monthly ranking for its utility-scale test of solar power panels. We’ve said � and continue to believe � that oil and gas companies like Chevron and its competitors remain some of the most important investors in cleantech and because of that will play an instrumental role in the years ahead in making renewable energy a viable source of energy.

We still believe that. But we can’t ignore the 5,000 barrels per day of crude that are threatening the shores of Louisiana, putting at risk an already fragile ecosystem and communities that for generations have depended on the Gulf for their livelihood.

The giant oil slick now threatening the Gulf region is a reminder that beyond the ongoing buzz, cleantech offers a fundamental opportunity to transform where we get our energy from.� We will probably not be oil-free in the foreseeable future but with the deployment of clean energy we will ultimately depend on cleaner, more sustainable and yes, less deadly sources of energy.

Image: iStockphoto

One Response to “The Week In Green Energy: Offshore In the USA�”

  1. [...] chance of getting a couple of Republican votes. But then Arizona stepped in and immigration became the issue of the day for the White House. For Graham, who had used a lot of political capital supporting the bill, that was too much. He [...]

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