National Grid Buys Half of Cape Wind Output

by Terrence Murray - May 7, 2010

Cape wind and National Grid have agreed on the terms of a long-term power purchase agreement, which has been submitted to the Massachusetts Department of Public Utilities (DPU) for approval.

Under the terms of the 15-year PPA, National Grid will buy 50 percent — or 210-megawatts — of the project’s future output and get renewable energy credits. Cape Wind will sell the power, generated by the 130 Siemens wind turbines to be deployed across Nantucket Sound, for 20.7 cents per kilowatt-hour. That’s about double the typical rates for power in New England. The price will increase by 3.5 percent over the contract’s lifetime. Last week Interior Secretary Ken Salazar granted Cape Wind a crucial federal permit. The plant is set to start operating in late 2012.

Cape Wind actually filed two contracts with the state’s PUC, one for National Grid. The other is a blueprint for a future PPA to sell the balance of the plant’s output and its clean energy credits.

, National Grid President Tom King said:

Carbon-based generation comes with its own set of long-term costs to our health and our environment. Cape Wind is an investment in our future, and one that we must support if we are to achieve a lower-carbon energy portfolio.

In the U.S., National Grid delivers electricity to approximately 3.3 million customers in New England and New York.

The PPA and the turbine supply signed with Siemens Energy in March are key developments that will let Cape Wind start serious discussion with banks to secure financing for the project, which is expected to cost about $1 billion to build.

Image: iStockphoto

7 Responses to “National Grid Buys Half of Cape Wind Output”

  1. Andy says:

    So does this mean those off-shore wind turbines are going to happen?

  2. Andy,

    Good question! The project is a lot farther along now and having the frameworks of a PPA agreement and approval from the Interior Department, makes it more than likely that it will be built. However, it does face a couple of hurdles: securing financing and have the PPA approve by state regulators. Financing is the big hurdle! Keep the questions coming….

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  4. [...] Grid, one of the largest public utilities serving Massachusetts customers, has agreed to buy electricity from the 130-turbine Cape Wind near-shore wind project in Nantucket Sound. The Boston Herald [...]

  5. [...] turbines; Scored a crucial Interior Department federal permit; And last week announced it would sell half of its electricity output to National Grid for 20.7 cents per kWh. The rate is about double what’s typically paid for [...]

  6. [...] this month, National Grid agreed on the terms of a long-term power purchase agreement for half of Cape Wind’s 420-megawatt output. The deal boosts the chances that this pioneer [...]

  7. [...] Spring National Grid agreed to purchase half of Cape Wind’s 420 megawatts total output. Cape Wind will sell the power, generated by the 130 Siemens wind turbines to be deployed across [...]

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