Friday, September 26, 2008

First Wind spinoff to build RI offshore wind project

By Mass High Tech Staff

The office of Rhode Island Governor Donald Carcieri announced today it has chosen Deepwater Wind to lead the development and construction of the state’s $1 billion offshore wind energy project. Deepwater Wind is an offshore wind development company formed by Newton-based First Wind Holdings Inc. and other investors.

While the project is still dependent on state and federal regulator approvals, it is expected to provide 1.3 million megawatt hours per year of wind power, equalling 15 percent of all electricity used in the state. The billion-dollar project is also expected to be funded using all private investment sources. The project is part of the governor’s plan announced in 2006 to generate 20 percent of the state’s energy from renewable power sources.

Deepwater Wind was established to develop utility-scale offshore wind projects in the northeastern part of the United States. The company’s major investors are First Wind, New York investment firm D.E. Shaw & Co. and asset management firm Ospraie Management, also based in New York.

First Wind, which filed a federal S-1 statement with the U.S. Securities and Exchange Commission in June announcing its intention to execute a $450 million initial public offering of stock, is responsible for the development of several land-bound wind projects in New England, including the 42-megawatt Mars Hill Wind Farm in Maine.

Deepwater Wind has pledged a private investment of $1.5 billion in Rhode Island, including the construction of a regional manufacturing facility in Quonset, and the creation of up to 800 direct jobs, with annual wages of $60 million. The Quonset facility will manufacture support structures upon which the turbine and its tower are based and will serve the entire northeast.

The exact location of the wind project will be determined from the results of a Special Area Management Plan (SAMP) permitting process led by the Rhode Island Coastal Resources Management Council in partnership with URI’s Graduate School of Oceanography.

The state and Deepwater Wind will now enter a 90-day period to negotiate a formal development agreement. The final agreement will include the total commitment to Rhode Island made by Deepwater Wind, including the establishment of a manufacturing headquarters in the state and the reimbursement of the cost of the SAMP to the Renewable Energy Fund. In addition, the agreement will outline the preferred developer status for Deepwater Wind in the permitting process.

In a statement, Governor Carcieri called the effort more than just an energy project, but a step in the creation of a new, alternative energy industry in Rhode Island.