Waging the Battle to Build the U.S.’s First Offshore Wind Farm

Jim Gordon’s initial accomplishment in proposing a wind farm off the coast of Cape Cod was unintended: He managed to unite Senator Edward M. Kennedy, the liberal lion of the Senate, with William Koch, the conservative petroleum and coal magnate and GOP fundraiser. Both opposed Cape Wind, the plan to put 130 giant wind turbines six miles off land in Nantucket Sound.

Ten years later, Gordon is on the verge of starting construction on the nation’s first offshore wind farm. His plans have survived a regulatory gauntlet that included reviews by 17 government agencies, court challenges, and bitter public squabbles with opponents — funded in large part by Koch.

But just as he is poised to plant the first turbine, with blades reaching 440 feet above the water, the renewable energy industry has been shaken. The U.S. Congress has not renewed the chief tax incentive that has fueled development of wind power, and natural gas prices have plummeted, undercutting renewable prices.

But backed by a sympathetic governor and Massachusetts laws that require utilities to buy from renewable sources, Gordon says he is confident the logic of wind power will prevail. In an interview with Yale Environment 360 contributor Doug Struck, Gordon talked about his decade-long fight to build the U.S.’s first offshore wind farm, why he thinks renewable energy developers will survive a boom in cheap natural gas, and why Cape Wind’s long struggle will ultimately benefit the clean energy sector.

“It was painful, it was costly, it was frustrating,” Gordon said. “But you know something, if it makes it easier for others after me, I take some pride in that. And I take some hope in that because America needs renewable energy.”

Yale Environment 360: How did you come to develop America’s first offshore wind farm?

Jim Gordon: Well, when I graduated from Boston University, instead of heading to film school, I made kind of a fork in the road. I graduated during the Arab oil embargo [in the 1970s]. There were block-long gas lines to get your automobile filled. I felt that energy was going to be a challenge that would be facing not only my generation, but future generations. So I jumped into the energy business.

We built new state-of-the-art, combined-cycle electric generation plants, which were basically marrying a gas turbine to a heat recovery boiler in a steam turbine. And that allowed us to produce energy very efficiently, orders

“The overwhelming majority of Massachusetts citizens… want the Cape Wind project built.”

of magnitude cleaner than the coal and heavy oil plants that made up most of the electric generation portfolio in New England. We did that for about 20 years.

And then in 2000, we took a step back. We felt that renewable energy was going to be the most important direction that we could take to further diversify New England’s energy generation portfolio and to produce clean, healthy electricity.

e360: But by picking offshore wind, you launched yourself into a 10-year fight that is not over yet. Is it worth it?

Gordon: I wouldn’t call it a fight, I would call it an epic battle. With every major energy or infrastructure project in New England you’re always going to have some opposition to it. People are resistant to change.

We were announcing a project that would produce over 75 percent of the Cape and islands’ electricity with zero pollutant emissions, zero water consumption and zero waste discharge — and most importantly harnessing an inexhaustible and abundant energy resource that’s ours, that’s not controlled by cartels overseas. We thought people would really be excited about it.

But we were surrounded by the wealthiest, most politically influential people in the United States, and a lot of them still are fighting this project. The overwhelming majority of Massachusetts citizens, according to independent public opinion polls throughout Massachusetts and on Cape Cod, want the Cape Wind project built.

e360: Why do you think it engendered a passionate opposition?

Gordon: This was bold. It was an ambitious project. It was certainly groundbreaking. And I think that people have a fear of the unknown and a resistance to change.

Over the last decade the project has gone through probably the most comprehensive and exhaustive environmental, socioeconomic review process of any energy project in the history of the United States, including nuclear

“ The results have shown the project is going to create significant public interest benefits at minimal impact.”

power plants and coal plants.

The results have shown the project is going to create significant public interest benefits at minimal impact. As these reports started to come out, you saw organizations like Greenpeace, Conservation Law Foundation, the Union of Concerned Scientists, Sierra Club, start to coalesce, and support the Cape Wind project, support a developer of an energy project. You had labor unions, health advocates, citizens-advocacy groups form and build a big coalition to support the project.

e360: Given that the opponents included Ted Kennedy and William Koch, the conservative billionaire and oil coal magnate, are you surprised you won?

Gordon: We haven’t won yet. Massachusetts won’t win until these are spinning, until we’re getting cleaner, healthier air, until we have created an emerging industry that I believe can stand next to biotechnology, medical technology, computer hardware and software engineering, information technologies, the great industries that have made Massachusetts a hotbed of innovation and prosperity.

e360: How much have you invested in this?

Gordon: Over $50 million.

e360: And most of that your own money?

Gordon: Uh, most of it is my own money, including the senior managers of Energy Management, our parent company that’s developing this project. We haven’t taken one outside dime.

e360: What will the total cost be?

Gordon: Of the project? That’s proprietary information.

e360: How much profit do you see in this?

Gordon: It’s very difficult to tell. I hope we’re profitable. I mean I want to show that it’s not just coal plants, and nuclear plants, and heavy oil-fired plants or even gas plants that can be profitable. We’re so far behind Europe

The Europeans have been operating offshore wind farms since 1991. America doesn’t have a single turbine in the water.”

and Asia in offshore wind. The Europeans have been operating offshore wind farms since 1991. America doesn’t have a single turbine in the water.

And part of it has been because the energy industry is extremely powerful in this country. They pay more money in lobbying and political contributions than any industry in the United States. And it’s a tough industry. And the incumbents, they fight for the status quo. We have enough offshore wind out there to power the whole United States.

e360: Wind power has been one of the fastest-growing new energy sources in the country. And yet, it is still just over 2 percent of our nation’s electricity supply. Do you foresee wind power ever being more then a niche in our U.S. energy scene?

Gordon: I do. And I can give you examples of other countries like Germany and Denmark. Denmark by 2030 will have 50 percent of their energy produced by wind. Germany by 2030 will probably have over 30 percent of their energy. Japan now, as a result of the Fukushima accident, they’re looking at offshore wind as a major future source.

I do believe that energy innovation and change takes a long, long time. It took us 50 years from going to hand-feeding coal in our basements to putting in oil-fired heating plants in our homes.

e360: What proportion of U.S. energy do you think wind can provide?

Gordon: The Department of Energy says by 2030, 20 percent of our energy can come from wind power and about 54 gigawatts of that would be offshore wind.

e360: Inherently, most people think wind power ought to be cheap, that the wind is free. And yet, the deals you struck with the utility companies will require them to pay 18.7 cents per kilowatt hour to start with, rising, perhaps, up to 31 cents per kilowatt hour. Currently, fossil fuels are at about 8 cents per kilowatt hour. What’s costing so much?

Gordon: In any of the beginning projects, if you look at other energy technologies like solar, the cost of solar panels have come down very dramatically — about 50 percent in the last five years. So the first offshore wind projects, there’s a lot of capital. We don’t have the infrastructure yet like they do in Europe. We don’t have the supply chain.

The more of these we build eventually will bring the cost down. But there’s something very important to remember: If you look at Cape Wind’s power, and you compare it against what you say is an 8-cent energy generation charge, you’re comparing that to the cost of fossil fuels. What you’re not calculating is a societal cost of burning coal, oil, and natural gas. I’m talking about the impact from climate change, I’m talking about military expenditures to defend the Persian Gulf supply lines, I’m talking about health impacts through the negative impacts of fossil fuel on our respiratory and cardiac [systems], on our health. Those things are not on your electric bill. They end up on your tax bill or your health care bill.

e360: Would the project be going ahead without the Massachusetts Renewable Portfolio Standard, which requires utility companies to get an increasing percentage of their power from renewables?

Gordon: No, and I don’t think low-income housing would be going forward, I don’t think historic [building] rehabilitation would go forward, I don’t think universities would be tax exempt. We have certain policy goals in this country. The majority of the public, in opinion poll after opinion poll, want more renewable energy, because they know it’s good for their health, they know it’s good for the economy, and they know it’s good for the environment.

e360: Congress is delaying renewal of the Wind Production Tax Credit. There are predictions that if the tax credit is not extended, the industry is going to be gutted, that new orders will drop by 75 percent. What would that do to Cape Wind?

Gordon: These are things we baked into the power contract to make sure that the project would go forward irrespective of how Congress acted.

Now, I do believe that the production tax credit, and maybe an investment tax credit for offshore wind, will be extended after the election. I really believe that, because, look, oil, coal and nuclear power have had subsidies for many, many decades. They still have lots of subsidies. For every dollar that renewable energy gets in an incentive, the fossil fuel and nuclear industry get $9.

We really need to understand a couple of things: That the energy business is subsidized in this country, in various ways. If you want to strip out all the subsidies and put everything on a level playing field, great. Do it. But you can’t have people screaming to keep the oil and gas subsidies for companies that are earning billions of dollars in profits for a single quarter, and complain that renewable energy gets 10 percent of the subsidy.

e360: Prices of natural gas have fallen to half of what they were three years ago. Does that undermine all renewables, and specifically, do you see in it any way stalling Cape Wind?

Gordon: It certainly gives people pause. And it certainly has interrupted the momentum that renewables were experiencing. So the question is: Are we going to put all our eggs in the natural gas basket when we’ve seen natural gas go up and skyrocket and then go down and skyrocket? These are cycles in the energy industry.

e360: In terms of technology, I lived in San Francisco, and I used to go over Altamont Pass where there’s rows and rows of wind turbines. I was often puzzled that so many of them were not spinning. And the explanation I got — right or wrong — is that they don’t work as well as we thought they would.

You’re going to be putting huge machines into the water, into an environment that can be hostile, that has known legendary storms. Do you ever — maybe before you go to sleep at night — think that you’re over-selling the technology and it’s not going to work as well as you think?

Gordon: The wind turbines that you’re referring to in the Altamont Pass were installed 30 years ago and many of them were manufactured by companies that are a distant memory, long extinct. They were made by

“I just want to see some steel in the water, and if somebody else is first, God bless them.”

backyard garage shops, small agricultural companies that made tractors. Today you’re looking at companies like General Electric, Siemens, Alstom — major global power generation companies that have taken on this technology. And over the last 30 years, there’ve been tremendous strides in the reliability, in the cost effectiveness, in the output of these plants.

e360: In February, the federal government designated wind energy areas off Maryland, Delaware, Virginia, New Jersey. Do you think Cape Wind will make it easier and faster for other wind farms to be approved?

Gordon: Anything has to be faster then Cape Wind. I think we helped evolve the regulatory framework and it was painful, it was costly, it was frustrating. But you know something, if it makes it easier for others after me, I take some pride in that. And I take some hope in that, because America needs renewable energy.

e360: I’ve heard there are competitors in Texas and Virginia who say they might get a turbine into the water before you. How do you feel about that?

Gordon: I just want to see some steel in the water, and if somebody else is first, God bless them.

I know that Cape Wind is going to be the first utility-scale project in federal waters and that will be a great sense of accomplishment and it will be a great victory for this region.

e360: You’ve already named an official eco-tour provider and anticipate a Cape Wind visitor center. Is your business plan modeled after more tourists than electrons?

Gordon: We had tourism directors from Denmark that hosted offshore wind farms for years saying that, “These are tourist attractions. We’re doing eco-tours. We have observation sites on land where people pay money to go up and rent binoculars and look at the wind farms.”

So I think Cape Wind is going to be one of the great eco-tourism attractions in the Northeast.