Who's Killing Renewable Energy?

In 2001, Jim Gordon, a Boston-based energy entrepreneur who played a critical role in the development of natural gas–fired power plants in the 1990s, was searching for a way to produce energy on the East Coast. Gordon recognized that dependence on Middle East oil was unsustainable, scientists and environmental activists were just starting to sound the alarm about climate change, and states were beginning to outline standards for renewable energy projects.

New England, densely populated and far from energy production, is one of the most expensive electricity markets in the country. Although the region lacks space on land for renewable energy production, it has one easily accessible, top-notch natural resource: a windy and relatively shallow ocean.

Gordon knew the Netherlands was generating renewable energy from wind turbines miles offshore, and “the New England coastline had similar geography and population density to Northern Europe, so offshore wind made sense,” he says. He began working on what would become the Cape Wind Energy Project in Nantucket Sound, off the Massachusetts shore.

Fifteen years later, bureaucratic obstacles, high costs, and wealthy Cape Cod residents hostile to a major renewable energy project near their homes plague the endeavor. Gordon is optimistic about the project, but some experts and analysts think Cape Wind may never break ground. Still, it has dramatically changed the landscape for offshore wind power in the United States. The story of the pioneering project underscores the difficulty of cultivating ambitious renewable energy sources and helps explain why more than 25 years after the first offshore wind farm was commissioned in Vindeby, Denmark, when offshore wind can meet 10 percent of Europe’s electricity demand, the United States is struggling to create a market for the resource.

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For the site of the project, Gordon chose Horseshoe Shoal, six miles offshore in Cape Cod. There was world-class wind and shallow water, and the spot seemed to “make perfect sense in liberal Massachusetts, where we supported renewable energy,” recalls Fara Courtney, who was working as a consultant and environmental policy specialist at the time. She is now executive director of the U.S. Offshore Wind Collaborative. Cape Wind’s 130 turbines were expected to generate 454 megawatts of electricity annually at their peak, around the same amount as a typical coal plant. On average, the turbines would generate 170 megawatts, providing 75 percent of the power for Cape Cod, Martha’s Vineyard, and Nantucket.

“From a meteorological perspective, it was a brilliant move,” says Stephanie McClellan, the director of the University of Delaware’s Special Initiative on Offshore Wind. “From a political perspective, it was a mess.”

Because of the location, the federal government would have to green-light the project, and the upper-crust residents of Cape Cod would have to welcome it.

From a meteorological perspective, it was a brilliant move. From a political perspective, it was a mess.

Stephanie McClellan, director of the University of Delaware’s Special Initiative on Offshore Wind

In the early 2000s, most people in the United States had never heard of offshore wind power, and Cape Wind seemed expensive and environmentally disruptive. Initially the electricity produced would cost around twice as much as the national average. Conservation and environmental organizations were also concerned about possible threats to marine and bird life. However, studies of the environmental impact and possible risks suggested the gains would outweigh any negatives. Oceana, the National Wildlife Federation, and the Sierra Club have given the plan their blessing. The farm is expected to cost $2.5 billion, but John Rogers, a senior energy analyst with the Union of Concerned Scientists who followed the research and regulatory process closely, says that despite the high cost, “we concluded that this was a project that had more benefits than risks.”

Though Cape Wind had the potential to address climate change and bring energy sources closer to big cities, it was threatening to do so in some fancy backyards. The project ran headlong into a typical roadblock to industrial development. “People always want to know, ‘How much does it affect the vistas and views?’ ” says Jeremy Richardson, Rogers’ colleague at the Union of Concerned Scientists. “Nobody wants it in their backyard, but the fact is we all want to turn the lights on.”

One of those fancy backyards belongs to William Koch. With a reputed net worth of $4 billion, William might not be as rich as his controversial older brothers, Charles and David, but he is just as likely to spend, lobby, and litigate on behalf of his personal and business interests. Koch owns a sprawling compound overlooking Nantucket Sound. He is also the founder of Oxbow, a fossil fuel–based energy company, and an outspoken critic of alternative energy.

“I was buying more property on the cape for a family compound, and the windmills would interfere with the aesthetics,” Koch told CommonWealth Magazine in 2013. “In addition to that, they cost too much. They’d up my power bill.”

Koch became the chairman of the Alliance to Protect Nantucket Sound, a nonprofit that has filed more than 26 legal challenges and regulatory appeals against Cape Wind, and along with other wealthy property owners, he has poured millions into the cause.

Cape Wind won all of those legal battles and is waiting on two outstanding appeals, but each victory has amounted to “death by a thousand cuts” for the project, says Courtney. Hyannis Port, home to the Kennedy family compound, is also near the proposed site. Both Sen. Ted Kennedy and his nephew Robert Kennedy Jr. actively opposed the project, despite their general support for environmental issues.

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These formidable detractors and the lack of a clear path to permits and regulatory approval have created “a perfect storm of opposition,” says Courtney.

When Cape Wind was proposed, there was no federal regulatory process for offshore wind development. Existing laws only addressed offshore extraction of oil and gas, and state and local authorities and 17 federal agencies, including the Army Corps of Engineers, each had a stake in the project. In 2005, shortly after Cape Wind received an environmental impact statement from the Army Corps of Engineers, Congress shifted responsibility to the Bureau of Ocean Energy Management. BOEM had its own arduous regulatory process, so Cape Wind didn’t receive permission from the Department of Interior to begin construction until 2010.

A crane hangs over the first jacket installed to support a turbine for a wind farm in the waters of the Atlantic Ocean off Block Island, Rhode Island, on July 27, 2015. Deepwater Wind, a planned five-turbine, 30-megawatt wind farm off the coast of Block Island, would be North America's first offshore wind farm. (Photo: Brian Snyder/Reuters)

“Managing on land, we have great agencies. In the ocean, we don’t have anyone who’s the master doing overarching, long-term planning,” says Jeremy Firestone, a policy expert on offshore wind and a professor at the University of Delaware’s School of Marine Science and Policy, who attributes the glacial pace of government approval to a lack of experience regulating the oceans.

Though Cape Wind is languishing because of these obstacles, with some experts questioning whether it will ever break ground, it has paved the way for subsequent projects. “If Cape Wind hadn’t been proposed, we wouldn’t have a regulatory process,” says Courtney.

Off the shore of Rhode Island, the Block Island Wind Farm, a facility of five turbines that will each provide six megawatts of electricity to Block Island residents, also faced legal challenges. But it only took six years for the Block Island project to receive its permits. The turbines are expected to start generating electricity in November. Though the Block Island Wind Farm received a warmer reception and gained government approval more quickly than Cape Wind did, it’s just as idiosyncratic. Block Island obtains its electricity from diesel generators, and residents pay 48 cents per kilowatt-hour. The wind farm could lower that cost by more than 40 percent.

Most projects that have been proposed aren’t affordable and can’t gain momentum because they’re small, high-risk one-offs that don’t have what McClellan calls “a pipeline for expansion” across the East Coast. As she explains, because the projects are risky, “the most expensive piece of building an offshore wind farm is the cost of borrowing money to build it.” Becoming a legitimate source of renewable energy for East Coast residents will require something that has eluded the movement until now: a market.

If there were a feasible plan for a network of offshore wind farms, experts believe that competition for these projects—as well as the emergence of expertise, technology, and infrastructure—would drive down costs. That’s what happened with land-based wind in the United States and offshore wind in Europe.

Policies are on the horizon that could help offshore wind reach the scale necessary to be affordable. Federal and state governments have been scouting locations for future facilities, and competition among companies bidding to lease these sites is expected to lower costs. Some experienced European companies are working to develop offshore wind projects in Massachusetts. In response to carbon-reduction goals, many states are writing offshore wind power into policies and statutes. Massachusetts is considering a law that would require utility companies to purchase between 1,000 and 2,000 megawatts of offshore wind power in the next 10 years. If the law passes, offshore wind power could become competitively priced by 2030, according to a future costs study by the University of Delaware’s Special Initiative on Offshore Wind.

“The first 30-megawatt project is really important for what it symbolizes,” Rogers says of Block Island. “But we need to be thinking about thousands of megawatts.”

As for Gordon, he also hopes that legislation passes and Cape Wind can go from being a pioneer project to a utility-scale electricity provider.

“I feel like Leonardo DiCaprio in The Revenant,” Gordon says. “We were the lone voice in the wilderness when we started, and we did an enormous amount of missionary work to educate people as to how offshore wind could fit into New England’s energy portfolio.” Gordon is glad that more experienced European energy companies are beginning to develop in the United States. “Now we’re not alone,” he says.