The Mighty Wind

By DAVID SCHARFENBERG  |  August 19, 2009

It was but the latest sign of progress on a Block Island project the company sees as a sort of trial run for the larger array it will build further out to sea a few years later. Not so much a test of the technology, Rich says, but a test of Deepwater's ability to procure materials, assemble a skilled workforce, coordinate logistics and obtain financing.

Formidable tasks, all. But one stands out.

Indeed, if the exotic engineering and logistical hurdles to a deep water wind farm can be cleared — and most observers think they can — the most serious obstacle to Rhode Island's Silicon Valley may be something far more mundane. The sort of thing that trips up mall developers and real estate types every day.



Before the economy went south, financial giants like AIG and Lehman Brothers were fueling the American wind industry, pouring money into wind farms in Iowa and Texas in exchange for the tax credits available to green energy companies.

But the collapse has sucked the cash out of an alternative energy industry that relied, perhaps too heavily, on a few big players. About 25 large financial firms invested in green energy in 2007, according to private equity firm Hudson Clean Energy Partners. A year later, at least 16 had pulled out of the market and in 2009, just six large banks remain.

Washington has attempted to fill the void with stimulus provisions that sweeten existing tax credit schemes and provide cash grants for clean energy projects. The measures have had limited success, though, in drawing big-money investors back into the field.

And the stimulus has little utility for the offshore wind industry. The benefits are available to projects that get up and running in the next year or two and offshore developers cannot meet that timeframe.

That's not to say the well has run dry for offshore wind. Deepwater, for its part, has backing from First Wind, a Massachusetts clean energy concern, and New York-based D.E. Shaw, one of the biggest hedge funds in the country. But the firm will probably still require more than $1 billion in debt financing.

Of course, the economy should return to something approaching normalcy before Deepwater has to secure the bulk of the cash. But even a healthy financial sector may be leery of pouring big money into a novel idea. It was just two years ago, after all, that plans for a wind farm off Long Island succumbed to ballooning cost estimates.

Still, Deepwater officials say they should be able to find a willing audience in European bankers more comfortable with offshore wind. And they are confident they have a compelling story to tell to any potential financier: a tale of a nation moving inexorably toward clean power, a state law that should provide the company with a market for its energy, and a Quonset Point brimming with potential.


A former naval base, Quonset covers some 3,200 acres in North Kingstown. There are wetlands, a golf course and 164 companies churning out plastics and medical equipment and boats. The Port of Davisville, at Quonset, is the fifth largest auto importer in North America.

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Related: A mighty wind, Photos: Stetson Wind in Maine, Letters to the Editor: August 28, 2009, More more >
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