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Deepwater doubles size of proposed U.S. wind farm

Developer of proposed farm off the coast of Rhode Island says greater scale would allow it to sell the electricity produced at a lower price.

The developer of a proposed wind farm off the coast of Rhode Island doubled the size of the project, saying that greater scale would allow it to sell the electricity produced at a lower price.

Deepwater Wind said it now plans to install 200 wind turbines some 20 miles off the shore of the smallest U.S. state. The project could generate enough electricity to meet the needs of 800,000 typical American homes.

The high price of electricity generated by proposed offshore wind farms has generated fresh public opposition to the projects as developers reach agreements to sell their power to utilities at more than double local prevailing rates.

Cape Wind, which intends to start building a wind farm off Massachusetts next year, signed an agreement to sell its power to utility National Grid at 18.7 cents per kilowatt hour and a smaller Deepwater project reached a deal to sell electricity to the same utility for 24.4 cents per kilowatt hour. Those are more than double local prevailing rates.

Deepwater said it expected the larger wind farm to sell electricity in the "mid-teens," referring to a rate of cents per kilowatt hour.

Securing a long-term contract to sell power is a key step in obtaining financing for a wind farm.

Business interests ranging from Wal-Mart Stores to the lobbying group Associated Industries of Massachusetts protested the price in Cape Wind's contract, saying it would push up costs at a time when companies can ill-afford it.

Providence, R.I.-based Deepwater, backed by hedge fund D.E. Shaw, said it expects to begin building the facility, which will include a transmission line connecting southern New England to eastern Long Island, in 2014 with the turbines beginning to run by 2015. The larger project would be capable of producing a 1,000 megawatts of power.

The United States leads the world with installed wind capacity, with some 35,600 megawatts of turbines installed. That's all on land, though.

Cape Wind, which aims to build a 420-megawatt installation, led the drive to build offshore U.S. wind farms a decade ago. It faced a thicket of delays, ranging from regulatory hurdles to public opposition that the spinning turbines could spoil beachfront views and harm shipping.

About a dozen offshore projects have been proposed off the eastern United States--waters off the West Coast become too deep too quickly to make offshore wind practical there.

Deepwater aims toavoid the aesthetics complaint by installing its turbines far enough out to sea that they will be barely visible from the shore. It has the backing of state officials in Rhode Island, who are struggling to lower one of the highest rates of unemployment in the United States.

Turbine makers including Siemens AG, which will supply Cape Wind, General Electric, and Vestas Wind Systems stand to benefit from a growth in U.S. offshore wind installations.