By Timothy Cama - 07/01/14 11:32 AM EDT
The Department of Energy (DOE) has conditionally committed to a $150 million loan guarantee to a Massachusetts project that would be the first commercial-scale offshore wind energy farm.
If built, Cape Wind would have a capacity of more than 360 megawatts off Cape Cod.
Jim Gordon, president of Cape Wind, called the announcement “an important endorsement by the United States government of the environmental, economic and energy benefits that offshore wind will provide to our country” in a statement.
In a Tuesday blog post about the project, Peter Davidson, director of the DOE’s loan programs office, said the loan guarantee is part of the department’s efforts to reduce the costs of wind energy.
“At LPO, our mission is to take innovative technologies like offshore wind that have been successfully demonstrated in the United States at a smaller scale and help provide the project financing to deploy at commercial scale for the first time,” Davidson wrote. “The lessons that could be learned from this project can help catalyze similar projects in other areas of the U.S. with excellent offshore wind resources.”
Since the early 1980s, the DOE has helped bring the cost of wind energy down by about 90 percent, Davidson said.
Tuesday’s announcement is the first step toward granting the loan guarantee, the DOE said. Officials will monitor the project’s developments before eventually reaching a final agreement.
Cape Wind has been held back by a number of legal challenges, but it has prevailed thus far, most recently in May.
The project’s backers said they will complete financing by the end of this year, and construction will start shortly thereafter.