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Vineyard Wind completes $2.3b bank financing

Work to start Thursday in Barnstable

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VINEYARD WIND said it will begin construction of the nation’s first commercial-scale wind farm as soon as Thursday now that nine banks have agreed to put up $2.3 billion in financing for the project.

Lars Pedersen, the CEO of Vineyard Wind, said he was pleased that the project is finally moving into the construction phase, but he was vague or declined to answer questions about a host of issues, including details of the financing, how many employees will be hired, how much equipment will be purchased in the United States, and how he will deal with a growing number of lawsuits seeking to block the project.

Pedersen said the financing deal means the company can now notify its nine major contractors and tell them to get moving. He said General Electric, for example, now has a firm order to move ahead with construction of the turbines it is building for the project, whose total cost will be approximately $3 billion.

“It’s really moving the project from talking about what we want to do and what we can do, to actually going to a new phase where we will be delivering what we’ve been talking about for so long,” Pedersen said.

The first steps will take place in Barnstable, as Vineyard Wind works on the onshore substation and the necessary cables to deliver electricity to the power grid. Pedersen said a lot of that work will require digging up roads, which will be done in tandem with a sewer project for the town.

Pedersen was vague about how many workers and equipment will come from the US. He said a lot of the offshore infrastructure will come from abroad because it isn’t currently manufactured in the United States. He said it’s his hope the lead contractors will subcontract to local firms when they can and those subcontractors will in turn subcontract with local firms.

Three lawsuits have now been filed seeking to block the project. Pedersen said he would have no comment on the lawsuits, but he noted the banks who are putting up money for the wind farm are aware of the litigation. “The lawsuits you are mentioning have been reviewed as part of the due diligence process and today we managed to close and nine banks decided to invest alongside us in this project,” he said.

One of those lawsuits, filed by Allco Renewable Energy, alleges federal regulators failed to examine safety and engineering issues associated with the GE Haliade-X wind turbines, each of which is taller than the 62-story tower (formerly the John Hancock Tower) at 200 Clarendon Street in Boston. The lawsuit alleges no offshore wind turbine that exists today can survive a Category 3 or greater Atlantic hurricane.

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About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

Pedersen said he is not concerned about turbine safety during hurricanes. He said all components are designed to withstand 100-year events. “We are well within the envelope. That’s a prerequisite for financing and insurance,” he said.

Vineyard Wind is a joint venture of Avangrid Renewables, a subsidiary of Avangrid Inc., and Copenhagen Infrastructure Partners.  The wind farm will be located 15 miles off of Martha’s Vineyard Wind; offshore work is scheduled to begin next year and conclude with the start of electricity production at the end of 2023.

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