Deepwater Signs Lease for Quonset
posted July 9, 2009 in Resident News

NORTH KINGSTOWN — With Monday’s unanimous approval of a lease agreement with Deepwater Wind, Quonset Development Corp. officials are hoping to make Quonset the Silicon Valley of renewable energy development.

The agreement, which will lease three parcels totaling 117 acres in the Quonset Business Park, allows the company to build its regional development headquarters and a regional manufacturing facility to build more than 100 wind turbines off the state’s coast.

“This development agreement marks a major milestone in the state’s march toward the development of offshore wind projects, and positions Rhode Island as the epicenter for renewable energy on the East Coast,” Governor Carcieri said. “We are moving in the right direction when it comes to making targeted investments in renewable energy in Rhode Island. Not only is this about bringing clean, green power that is not subject to variations and increases in fuel prices to our state, but this is also about bolstering economic development in Rhode Island and furthering our efforts to enable Quonset to realize its full potential.”

Last week, Carcieri signed legislation that was crucial to bringing the proposed project closer to a reality, requiring National Grid to enter into long-term contracts to purchase power from renewable energy producers in the state.

Paul Rich, Deepwater’s chief development officer in Rhode Island, has said the legislation was an essential part of the privately-funded $1.5 billion project because it provides stability and a revenue stream that would protect the company’s investment.

Under the terms of the 10-year lease, Deepwater will pay an annual rent of $1,931,000 for the first five years and $2,220,065 per year for the following five years. The company will then have the option to extend the lease in five-year increments, with the rent increasing by 15 percent every five years.

The Town of North Kingstown will receive about $295,000 of payment in lieu of taxes for the first five years and about $340,000 for the next five years. There will be an increase of 15 percent every five years following the first 10 years of the lease.

Major development on the three parcels, one waterfront and two inland, will not take place for a while because Deepwater still needs to secure financing and pertinent state and federal permits.

Chris Wissermann, Deepwater Wind’s managing director for the Rhode Island project, assured the QDC board that financing would not be an issue and said that he has been speaking with European banks that have financed similar projects in Europe over the past decade.

Before they enter into the lease, Deepwater will have a three-year option on the parcels and will pay QDC $100,000 for the first year, $150,000 for the second and $325,000 for the third.

QDC Managing Director Steven J. King said the lease agreement also includes a provision that requires Deepwater to maintain a workforce of at least 500 employees.

Carcieri said the project will create a minimum of 800 jobs with annual wages over $60 million.

Potential employees would be involved in the process of building the steel “jacket foundations” that would make up the base of the wind turbine and be placed in deep waters up to 150 feet off Block Island.

The first phase of the project would be the construction of between five and eight wind turbines about three miles off the southeast coast of Block Island. The second phase would be to erect another 115 about 20 miles off Point Judith.

Officials say those turbines would generate 1.3 million megawatt hours per year of renewable energy that would provide enough energy to power 110,000 households, about 15 percent of all electricity used in the stateWork on the construction and erection of the turbines off the coast of Block Island is expected to begin in the next couple of years, according to King.“Within two years, we’re going to see a lot of activity,” he said.

Also under way is a two-year process that will begin to determine the exact location of the wind project through a Special Area Management Plan permitting process, which will be led by the Rhode Island Coastal Resources Management Council in partnership with the University of Rhode Island’s Graduate School of Oceanography.

“Deepwater’s development agreement with the Quonset Business Park is another example of Rhode Island’s commitment to becoming the leader in the alternative energy industry,” said J. Michael Saul, interim executive director of the state Economic Development Corp.

For more information on Deepwater Wind and its Rhode Island project, visit www.dwwind.com.

The full article can be found at North East Independent.com.