As it constructs the “largest turbines in the western world” in the waters southwest of Nantucket, Vineyard Wind has made its first mitigation payment of $4 million to the town, $2.5 million of which was deposited into an account to be administered by the Nantucket Community Foundation.
The payment comes more than three years after Nantucket’s Select Board, along with the Nantucket Preservation Trust and the Maria Mitchell Association, signed the so-called “Good Neighbor Agreement” with Vineyard Wind. The agreement bound the town and those organizations to commit their support to the offshore wind energy project in exchange for $16 million to mitigate the potential historical, cultural, and economic impacts of the turbines on Nantucket.
Back in 2020 when the “Good Neighbor Agreement” was signed, Vineyard Wind, which is owned by Copenhagen Infrastructure Partners and Avangrid Renewables (a subsidiary of the Spanish energy giant Iberdrola), pledged an initial $4 million payment “when construction financing is obtained” to seed the so-called “Nantucket Offshore Wind Community Fund.”
When asked about the difference between the $4 million payment and the amount to be distributed through the Community Foundation, attorney Greg Werkheiser, who represented the town of Nantucket in negotiating the agreement with Vineyard Wind, stated "Vineyard Wind contributed $4 million as it promised to do so in the Good Neighbor Agreement. Maria Mitchell received a one-time disbursement from the initial payment, which reduced the amount available for competitive grants. In addition, the Town paid attorney’s fees from the contribution."
The amount paid to the Maria Mitchell Association was not specified, and its executive director Joanna Roche did not immediately respond to a message seeking comment.
On Oct. 25, Vineyard Wind announced that it had raised $1.2 billion for the offshore wind energy project through a tax equity package with J.P. Morgan Chase, Bank of America, and Wells Fargo. The company called the investment transaction “the largest single asset tax equity financing” in the U.S.
According to a press release issued late Thursday afternoon, Vineyard Wind will make additional payments into the fund “totaling $12 million in the next 6 - 8 years.”
The money will be distributed by the Community Foundation through a grant program “to support community projects and initiatives related to protecting, restoring, and preserving cultural and historic resources, coastal resiliency, climate adaptation, and renewable energy,” according to the press release.
The initial $2.5 million payment and the establishment of the fund is “the first of its kind in the nation,” according to the Nantucket Community Foundation.
The “Good Neighbor Agreement” was negotiated by the town’s special counsel, Cultural Heritage Partners. In addition to the mitigation payment of $16 million, the agreement also requires Vineyard Wind to paint the turbines a “non-reflective off-white/light gray color to blend into the horizon” and to install an aircraft detection lighting system (ADLS) which will only turn on if there is an aircraft in proximity to the turbines.
Under the terms of the agreement, the town, the Nantucket Preservation Trust, and the Maria Mitchell Association are required to “convey support for the projects” and “ensure that Nantucket residents and visitors are informed of the benefits of the projects.”
Critics of the agreement, including the Nantucket-based “ACK For Whales” group - which is suing Vineyard Wind in federal court to stop the project - renewed their concerns Thursday about the financial arrangement between the town and the developer.
“We continue to be very disappointed that the town of Nantucket signed the ‘Good Neighbor Agreement’ with Vineyard Wind as offshore power plants directly off our south shore will negatively impact our environment forever,” said Amy DiSibio, a member of ACK For Whales’ board of directors. “The damage that Nantucket, our ocean, and particularly animals like the critically endangered North Atlantic Right Whale will incur cannot be offset by a few million dollars.”
The Community Foundation For Nantucket outlined how the money will be distributed in its statement released on Thursday. Of the initial $2.53 million payment provided by Vineyard Wind, $1.25 million is earmarked for projects by the town of Nantucket, and $600,000 is committed to projects by the Nantucket Preservation Trust.
The remaining $600,000 is available for Nantucket community grant applications from non-profits and other qualified community groups. Applications for grants will be available on November 17, 2023, on the Community Foundation for Nantucket’s website, and will be due by January 31, 2024. For the first grant cycle, the maximum award is anticipated to be $50,000 per project.
Grant winners will be selected by a seven-member voting advisory committee of Nantucket community members with expertise in historic preservation, coastal resiliency, and renewable energy, including representatives from town of Nantucket and Nantucket Preservation Trust. Vineyard Wind has appointed Rachel Pachter, its chief development officer, as its ex-officio, non-voting member.
“The town of Nantucket is pleased to help launch the Offshore Wind Community Fund,” town manager Libby Gibson said in a prepared statement. “We have consistently advocated for the need to avoid and minimize adverse effects from offshore wind developments and to mitigate adverse effects that cannot be avoided. The Fund is the first of its kind in the nation and provides a model for future offshore wind projects and for historic communities nationally. Mitigation funds administered directly by communities themselves are an important tool in helping achieve balance between large offshore energy developments and adverse effects communities will realize over the development’s lifespan.”
Vineyard Wind’s first project southwest of Nantucket is planned to include 62 turbines spaced one nautical mile apart, each reaching 837 feet in the air at the tip of its blade, nearly as tall as the Eiffel Tower. The company believes the entire project, when operational, will generate 806 megawatts, enough to power more than 400,000 homes and businesses in Massachusetts.
While Vineyard Wind is forging ahead with what it hopes will be the first large scale offshore wind energy project in the United States, another wind energy developer, Orsted, recently canceled two planning offshore wind projects off New Jersey. It cited financial and supply chain challenges.
Photos below by Kit Noble from an October trip to the Vineyard Wind farm after the first turbine was completed.