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Salazar Signs Lease for Cape Wind, Nation’s First Offshore Wind Farm

By Rona Cohen

U.S. Interior Secretary Ken Salazar on Wednesday signed a 28-year lease for Cape Wind, officially clearing the way for the nation’s first commercial offshore wind project after a prolonged, eight-year permitting process that was beset by fierce opposition from a range of local groups.

When completed, the project’s 130 turbines will have a maximum output of 468 megawatts (MW), and are expected to meet 75 percent of the electricity demand of Cape Cod, Martha’s Vineyard and Nantucket Island.

The signing was conducted during a conference of the American Wind Energy Association in Atlantic City, New Jersey. Salazar was joined by Cape Wind President Jim Gordon.

Salazar had given initial approval to Cape Wind in April, after the company agreed to minimize the project’s impact on environmental or cultural resources. The wind farm will be built in federal waters some five miles offshore.

The lease will cost Cape Wind $88,278 in annual rent prior to production, and a 2 to 7 percent operating fee during production. The fee is based on revenues from selling the offshore wind energy in regional markets.

Developing the OCS

During a keynote address at the conference, Salazar vowed to work with federal agencies, state government and the private sector to speed the permitting process and move aggressively to tap the offshore potential of the 1.75 billion acres on the Outer Continental Shelf (OCS) that fall under the jurisdiction of the federal government.

The area’s sheer size dwarfs the 250 million acres of land in the western United States that are overseen by the Bureau of Land Management. The government has been moving aggressively to approve new wind, solar and geothermal projects on those lands, and expects to have “thousands of megawatts” permitted by the end of this year, said Salazar.

On Tuesday, Salazar approved two solar projects in California through BLM’s new “fast-track” process that together will produce more than 700 MW of power. They are the first large-scale solar projects ever permitted on public lands.

“If we can do that onshore, there is no reason why we can’t do that offshore,” said Salazar.

Earlier this year, Salazar established the Atlantic Offshore Wind Energy Consortium with governors of 11 East-Coast states to accelerate clean-energy development in the region. Participants have formed state-specific task forces that by year-end expect to identify “high priority” areas for wind development with bountiful wind and minimal environmental problems, said Salazar.

“I believe we can cut the permitting time significantly if we are focused and proactive,” he said.

That includes coordinating at all levels of government to conduct area-wide environmental reviews of portions of the OCS deemed promising for wind development, and identifying potential conflicts ahead of time, to help provide more certainty for investors. Salazar said it would make sense to explore the creation of a transmission “backbone” in the Atlantic to serve those areas, though he did not provide details on what that would entail.

Salazar said that moving aggressively to tap the nation’s offshore potential is a critical component of President Obama’s efforts to create jobs, improve the nation’s economic security and safeguard the environment. He called Cape Wind a pioneer of U.S. offshore wind development.

“Our responsibility now is to take the lessons learned from that long and painful process, and from the growing pool of experiences with offshore wind development around the globe – and build a smart U.S. program for the OCS,” said Salazar.

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