The U.S. Department of Energy announced the first step toward issuing a US$150 million loan guarantee to support the construction of the Cape Wind offshore wind project with a conditional commitment to Cape Wind Associates, LLC.
The project would be the first commercial-scale offshore wind facility in the U.S., with a capacity of more than 360 MW of clean energy off the coast of Cape Cod, Massachusetts.
The total investment is estimated at US$2.5 billion.
The project was first proposed in 2001. Cape Wind developers have reached multiple milestones over the last year and expect to start construction in early 2015. Commercial operations are scheduled to start in late summer, 2016.
A US$600 million loan from EKF, a Danish Export Credit Agency, was approved in February. Copenhagen Infrastructure Partners previously pledged US$200 million in financing and Siemens AG has pledged to invest US$100 million.
Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU), Natixis and Rabobank are serving as project’s Lead Arrangers to structure and arrange the syndication of the senior debt financing to additional lenders. The Lead Arrangers are expected themselves to make significant commitments which, together with EKF, would provide more than $1 billion.
Secretary Ernest Moniz said regarding the US DOE's conditional commitment to the project:
In just the last year, eight projects in the Department’s Loan Programs Office have become fully operational, including one of the world’s largest operating photovoltaic solar power plants, the world’s largest concentrating solar power plant, and a vital Western transmission line. These innovative projects are delivering clean, renewable energy for American consumers today and are helping to diversify our energy portfolio. The Department’s loan guarantees have assisted the launch of new industries in the U.S., and today’s announcement of a conditional commitment to the Cape Wind project demonstrates our intent to help build a strong U.S. offshore wind industry.
The proposed Cape Wind project would use 3.6 megawatt offshore wind turbines that would provide a majority of the electricity needed for Cape Cod, Nantucket and Martha’s Vineyard.The Cape Wind Project is an approved offshore wind farm on Horseshoe Shoal in Nantucket Sound off Cape Cod,Massachusetts, United States. The project is proposed by a private developer Cape Wind Associates, the brainchild of Jim Gordon of Energy Management Inc. The wind farm, which may become the first offshore wind energy project in United States coastal waters, is projected to generate 1,500 gigawatt hours of electricity per year derived from wind power.