Dec. 16 (Bloomberg) -- Cape Wind, the proposed $2.6 billion wind farm off the coast of Massachusetts criticized by local residents including the Kennedy family, will qualify for a key federal tax credit that expires at the end of the year, according to its turbine supplier Siemens AG.
Construction of some components has already begun, meeting the requirements for the investment tax credit, said Markus Tacke, chief executive officer of Siemens Energy’s wind power division.
The project has been in the works for 12 years, and has faced opposition from fishermen, American Indian groups and the Kennedy family, whose compound of homes overlooks Nantucket Sound. It would become the first U.S. offshore wind farm if built.
“They are doing significant work,” Tacke said in a phone interview. “There are some foundations being built and developments being done. I’m convinced it will” qualify for the credit.
Wind projects, including the 468-megawatt Cape Wind proposed for Nantucket Sound, must begin construction by Jan. 1 to qualify for the investment tax credit or the production tax credit.
“We are pursuing the ITC and are hopeful we will qualify,” Mark Rodgers, a spokesman for the Boston-based developer Cape Wind Associates LLC, said in an e-mailed response to questions. The investment tax credit, which reimburses developers as much as 30 percent of project costs, would be worth $780 million for Cape Wind.
The wind farm still faces five lawsuits, according to Audra Parker, director of the Alliance to Protect Nantucket Sound, which opposes the project, said in a phone interview.
“The project is uncertain and in our estimation won’t happen because of the legal and financial challenges,” Parker said in an interview today.
“We haven’t even started to see what’s going to happen with the federal legal challenges,” Parker said. “At this point they’ve been saying since 2005 that they’d start construction in the next year.”
Cape Wind has state and federal permits and National Grid Plc and Northeast Utilities’ Nstar unit have agreed to buy most of the power. The Danish pension fund PensionDanmark pledged $200 million in funding for Cape Wind in June.
--Editors: Will Wade, Randall Hackley