By Ted Nesi

PROVIDENCE, R.I. (WPRI) - Executives at the renewable-energy firm Deepwater Wind don’t see any logic in critics’ efforts to link it with 38 Studios because the wind company is relying on private investors to finance its project and is being closely scrutinized by regulators.

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• Related: Q&A: How the Deepwater Wind-National Grid deal works (Aug. 11, 2010)

(rendering: Deepwater Wind)

Advocates of renewable-energy projects often emphasize that one of the benefits will be an increase in manufacturing jobs for states like Rhode Island.

So it’s a little depressing to see that a Rhode Island company doing a project in Providence funded by a state agency has picked a Chinese firm to build wind turbines in North Dakota. PBN reports:

Gilbane Building Co., the firm overseeing the construction of wind turbines at a Providence wastewater treatment plant, has selected Goldwind USA to provide the three turbines for the project.

Goldwind USA, a subsidiary of China’s Xinjiang Goldwind Science and Technology Co., said on Monday it will provide three 1.5 megawatt permanent magnet direct-drive turbines, each with 82-meter rotors on 70-meter towers. The turbines’ blades will be manufactured at LM Wind Power’s Grand Forks, N.D., plant.

The turbines will be constructed at the Field’s Point Wastewater Treatment Facility; Gilbane won a $12.2 million contract to oversee the project in September from the Narragansett Bay Commission.

In fairness, I’m not sure there is a manufacturer here in Rhode Island that could make the blades Gilbane and the commission need. But considering Rhode Island’s 11% unemployment rate is more than triple North Dakota’s 3.6%, it seems unfortunate.

Clark's Tree Farm, Tiverton

Once upon a time, Christmas trees were a big business in Rhode Island.

Tree farming boomed here in the 1960s and ’70s, partly thanks to a generous federal tax break that let farmers write off their expenses to offset other income. And when they did make a profit from tree sales, it was taxed as a capital gain.

At the same time, officials here in Rhode Island were encouraging dairy farmers to use pasture land to grow trees. The state Taxation of Farm, Forest, and Open Space Land Act also gave the industry a boost when it was enacted in 1980.

But Congress eliminated the federal tax break in 1986, and the Christmas tree industry has been shrinking locally ever since.

The number of farmers belonging to the Rhode Island Christmas Tree Growers Association, which peaked at nearly 150 in 1980, has now fallen to about 40, said Eric Watne, the group’s president. The Department of Environmental Management counted 34 active tree farms in Rhode Island this year.

The farmers who are still around are a hardy bunch, though.

In recent years they’ve seen a resurgence in sales as more shoppers embrace the buy-local movement. Watne, who bought Clark’s Tree Farm in Tiverton in 2003, said he sold all 400 or so trees he had this year, boosting his revenue 15% compared with last Christmas. They sold for $40 to $50 on average.

“From what I’ve heard from other growers as well, folks have been getting cleaned out,” he said.

Clark’s and Henry’s Christmas Tree Farm in Cranston are Rhode Island’s two oldest Christmas tree farms; both opened in the late 1950s. They inherited the honor after Coventry’s Horatio Chase died last year.

“It’s great – it’s fun,” said Watne, who runs Clark’s with his wife, Catherine. “By Christmas we’re exhausted.”

Rhode Island’s agricultural sector has seen a big revival over the past decade, with the number of farms in the state jumping 42% between 2002 and 2007. But the so-called “green” agriculture industry – nurseries, tree farms and other “non-edible floriculture” – has lagged food providers, according to Ken Ayars, chief of the state’s Division of Agriculture.

“Another issue with the Christmas tree growers is that generally it’s a part-time occupation, and they are getting older,” he said. “There’s not so many new farmers coming into the business, which is problematic for them.”

Still, Ayars thinks “a slow resurgence is occurring” for tree farmers. “I definitely see a better future for them,” he said.

Americans bought 28.2 million farm-grown Christmas trees and another 11.7 million artificial trees in 2009, according to the National Christmas Tree Association.

Growing Christmas trees is a tough business, Watne said. It can take as long as 10 years for a new farmer to be able to start selling his crop and make money. That’s why Watne believes the future of the business may lie in existing farms adding trees to their land, as Peckham Farm in Middletown has done.

“It’s a lot more work than I thought when I got into it,” said Watne, who like many of the state’s newer farmers also works a day job. “I sort of thought – it’s a tree, you just plant it. But it’s a full-time hobby. It takes a lot of time.”

Deepwater Wind announced today that it is doubling the proposed size of its larger offshore wind farm to 200 turbines. The expanded project – which is different from Deepwater’s small pilot wind farm planned off Block Island – could generate up to 1,000 megawatts of electricity about 18 miles off Rhode Island’s coast. The Providence Journal’s Alex Kuffner offered a thorough rundown of the latest iteration in today’s paper, and I recommend his article.

This morning I called Matt Kaplan, an associate director at the Cambridge consultancy IHS Emerging Energy Research who covers the North American wind energy industry. I asked him for his take on Deepwater’s announcement, what challenges the company faces in moving forward, and how this fits into the broader offshore wind picture here in New England (think Cape Wind). Here’s a transcript of our conversation, lightly edited for clarity.

What’s your take on Deepwater Wind’s big announcement today?

The project itself is of a very large scale – 1,000 megawatts would put it up there as one of the largest proposed offshore wind projects in the U.S. So it’s a very ambitious and aggressive announcement, especially in light of some of the challenges that offshore wind has faced in the past couple of years, and that includes the permitting process, which has traditionally been a challenge, as well as making project economics work.

(more…)

D.E. Shaw, the huge New York hedge fund paying for Deepwater Wind’s efforts to build two wind farms off Rhode Island, has run into financial problems and is now reviewing its investments. My story is up on WPRI.com:

The New York hedge fund backing Deepwater Wind, the company picked to build two wind farms off Rhode Island, has run into financial problems just as the project faces a court challenge.

D.E. Shaw & Co. fired 10 percent of its work force, or 150 people, to deal with a 46 percent plunge in the value of its assets, Bloomberg News and other outlets reported Tuesday. The fund’s holdings fell to $21 billion as of Sept. 1, Bloomberg said.

D.E. Shaw is also conducting a strategic review of its investments and operations, according to the Financial Times. The fund had sunk “tens of millions of dollars” into Deepwater Wind as of June, a company executive told The Block Island Times .

An exclusive WPRI 12 poll set for release tonight shows the Deepwater project is popular with Rhode Islanders, with 56 percent of likely voters saying they would be willing to pay an additional $1.35 to $3 per month for electricity to support it. Only 32 percent opposed doing so, and 12 percent were not sure.

No word on what impact – if any – this could have on the company’s projects here, which are already facing a court challenge expected to stretch into next year.