NEW YORK (
) -- The first offshore wind power project in the U.S. received a key approval from the state of Massachusetts on Monday.
received approval from the Massachusetts Department of Public Utilities to sign a 15-year Power Purchase Agreement with U.K.-based
. National Grid will be buying Cape Wind's energy, capacity and renewable energy credits under the terms of the PPA.
It's been a nine-year battle for Cape Wind against the political establishment in Massachusetts and elite elements of Martha' Vineyard, including the Kennedy clan. Cape Wind president Jim Gordon said in a statement on Monday afternoon, "Today's approval validates that Cape Wind is a good value delivering clean energy without all of the associated costs of fossil fuels. This long-term contract not only secures an abundant, inexhaustible clean energy resource but protects consumers from rising fossil fuel and environmental compliance costs."
Cape Wind and National Grid announced their intention to sign the PPA in May.
The U.S. terrestrial wind market has had one of its worst years on record in 2010, with companies like
(BWEN - Get Report)
seeing their stock value dive and once-heralded initial public offering candidates like
find the market conditions to be choppy. Meanwhile, U.S. companies with a focus on selling into overseas wind power markets, have fared better, such as
(AMSC - Get Report)
, which sells wind equipment to Asian wind market companies.
Rate-payer organizations concerned about the costs being passed on to the customers of electricity, and environmental lobbies, have made it difficult for wind power projects to secure the necessary approvals.
Meanwhile, the European offshore wind market has become a focus for sellers of wind turbines and other wind power equipment, including big industrial players like
(GE - Get Report)
setting their sights on the U.K. opportunity.
The European wind market is not without issues overall, though. On Monday, European wind market giant
announced guidance for 2011 that expects no profit growth year over year. It was a surprise as Vestas announced in October it was laying off 3,000 workers and closing factories in Denmark and Sweden. Declining demand, tight credit, and the Euro zone debt crisis providing a weak macroeconomic backdrop for its business are all factors in the Vestas outlook.
has opened its North American Offshore Wind office in Boston because of Cape Wind, the company said in its statement announcing the regulatory approval. Earlier this fall,
(GOOG - Get Report)
announced an ambitious plan to fund the development of an offshore wind power electricity transmission system.
Last month,GE and Siemens were among the companies saying they would invest $629 million in the U.K.'s offshore wind sector after the British government assured the companies of threatened port funding that deals directly with the issue of wind power infrastructure.