Cape Wind's latest hurdle a breeze?

Opponents of the Cape Wind project may get a small but fleeting victory this week, as the Cape Cod commission is expected to block a permit for the undersea cable needed to connect the wind farm to an onshore substation.

"I don't think it's going to have any substantive impact. We're going to move forward in the permitting of the project," Mark Rodgers, spokesman for Cape Wind Associates, told the Cleantech Group.

The proposed 130 turbine project, to be built off the coast of Massachusetts covering about 25 square miles, is expected to be commissioned in 2011.

It has attracted a small, but powerful, stable of opponents, including U.S. Sen. Ted Kennedy, who has a house on Cape Cod.

Some opponents are worried about the wind farm ruining their view. Cape Wind Associates said from the closest beach on Cape Cod, in clear conditions, the wind turbines will appear one half-inch above the horizon.

Take a look at a simulated view from the mainland here >>

This latest hurdle looks to be just a small bump in the road for the company that's been developing the offshore wind farm for the past six years.

The Cape Cod Commission's jurisdiction covers the submerged electric cables within three miles of the shoreline. It released a draft opinion denying the permit, and plans to put the decision to a vote on Thursday. But that vote won't necessarily give them the last word.

"According to Massachusetts law, the Massachusetts Energy Facility Siting Board has final authority on this matter," said Rodgers.

"They approved these cables in 2005, they conducted a 39 month, quasi-judicial, adjudicatory hearing process on everything having to do with these cables, and determined that the cables and the project would provide substantial benefits to Massachusetts."

Energy Management, which formed Cape Wind Associates, has already spent $30 million on the proposed wind project.

Energy Management has been around for almost 30 years, building and operating six different natural gas plants in the 80s and 90s. The company sold those facilities in 1999 and 2000, and is using some of that cash to fund Cape Wind.

"We're putting at risk, admittedly, some of the capital from past business success in natural gas to try and bring utility scale clean energy to Massachusetts," said Rodgers.

Energy Management is working with Lehman Brothers to pull in financing for the building phase.

"It would be a combination of debt and equity, as is common for traditional power projects," said Rodgers. "As we get farther along in the conclusion of the permitting of this project, I think we'll also be able to get farther along in the project finance side."

The 468 megawatt wind farm is expected to cost in excess of $1 billion.

Rodgers said the company plans to appeal the commission's decision if it decides to block the permit, but the real milestone will be federal approval, which is expected to come in mid-2008.

The issue of the permit for the undersea cable is likely to be resolved "in parallel" with the remaining work on the federal side, said Rodgers.

The state approved the project in March.

An offshore wind project in New York never got as far as Cape Wind, getting killed in August after the chairman of the Long Island Power Authority called the plan too expensive (see Offshore wind gets pricey).

The power authority, which would've footed the bill for the wind farm, released an independent report on the 140 MW project which estimated costs of over $800 million, including the price tag for the transmission cable to bring the power to shore.

First proposed in 2003, original estimates for the Long Island wind farm were between $150 million and $200 million.

In the case of Cape Wind, the Cape Cod Commission cited a lack of information in its draft denial of the undersea cable. Cape Wind Associates filed its application with the Commission in November 2001.

"Obviously we'd prefer that they decide to approve it. Is it going to have any material effect in the end on whether or not the project is built, or when it is built? I don't think it will, no."