September 25, 2008 / 7:42 PM / in 9 years

Deepwater to build Rhode Island offshore wind farm

NEW YORK (Reuters) - Rhode Island picked Deepwater Wind to develop an offshore wind farm expected to cost more than $1 billion and provide about 15 percent of the state’s electricity, state Gov. Donald Carcieri said in a release Thursday.

The wind farm was expected to generate about 1.3 million megawatt-hours a year. The governor did not say when the project would start delivering electricity.

Rhode Island selected Deepwater after reviewing seven bids on its April request for proposals to build an offshore wind farm.

Deepwater was established to develop utility-scale offshore wind projects in the northeast United States.

To help seal the deal, Deepwater pledged to make a significant investment in the state of about $1.5 billion with the construction of a regional manufacturing facility in Quonset and creating 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 that will serve the entire northeast.

To help pay for the project, the governor recently urged the state Public Utilities Commission to require the state’s power company, National Grid, to enter into long-term energy contracts with renewable generators, like Deepwater.

In 2006, Gov. Carcieri said he wanted to increase the use of renewable sources of energy to 20 percent with wind energy making up about 15 percent.

The exact location of the wind project will be determined by the Special Area Management Plan permitting process led by the Rhode Island Coastal Resources Management Council in partnership with the University of Rhode Island’s Graduate School of Oceanography. That process is expected to take about two years, according to the governor’s release.

Deepwater will now enter a 90-day period to negotiate a formal development agreement with the state. The final agreement will include Deepwater Wind’s total commitment to Rhode Island, including the establishment of a manufacturing headquarters in the state and the reimbursement of the cost of the permitting process.

Final approval of the project is contingent on multiple regulatory approvals from both the state and federal governments.

The major investors in Deepwater are Newton, Massachusetts-based FirstWind, a developer of onshore wind projects in the United States, New York-based capital investment firm D.E. Shaw & Co and New York-based Ospraie Management, an asset management firm with a focus on alternative energy.

Reporting by Scott DiSavino; Editing by Marguerita Choy

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