By Eric Lindeman

In a twist of bureaucratic creativity, the Department of Defense and the Federal Aviation Administration may have found a novel way to fund replacement of an aging radar system for commercial and military airports on and around Cape Cod, Mass.–getting an offshore wind farm developer to pay for it.

But that’s not what has happened in Oregon, where DoD threatened to block a huge, planned onshore wind farm near a 50-year-old radar installation. There, as a result of a negotiated political agreement, DoD and FAA are permitting the wind energy project to move forward, and the government will pay for a new radar system that will not be subject to interference caused by rotating wind turbines.

The two cases–and there are others–point to a policy dilemma: renewable energy and energy security are going head to head with national security. At an Energy and Natural Resources Committee hearing last week, Oregon Sen. Ron Wyden (D), who also sits on the Intelligence Committee, wanted to know what the DoD policy is for evaluating wind energy projects. Grilling DoD Deputy Under Secretary for Installations and Evironment Dorothy Robyn, he demanded, “What’s being done to get a system in place so that this country can have national security and energy security?”

Cape Wind, a 468-megawatt wind farm off the coast of Massachusetts’ Cape Cod, was approved by Interior Secretary Ken Salazar April 28, ostensibly ending nine years of contentious proceedings. All that remained in the path to construction was FAA approval. And after conducting the legally required “aeronautical study,” FAA issued a “determination of no hazard to air navigation” May 17.

But that finding carried with it a proviso that developer Cape Wind Associates LLC set aside $15 million “in escrow or other financial means” to pay for modifications to two outdated air navigation systems–one at Otis AFB in Falmouth and the other at Nantucket. If the modification at Falmouth, the older of the two, doesn’t work, then FAA said Cape Wind will be financially responsible for “acquisition, siting and installation” of a newer radar system that is less likely to be affected by the interference that spinning wind turbine blades can cause under certain conditions.

The Falmouth radar system was slated for replacement after 2004, according to an FAA New England region official, but funding for that project was cut and the plan lay dormant since.

“It is what it is,” said Mark Rodgers, spokesman for Cape Wind.

The radar interference issue came to head earlier this year with the Shepherds Flat wind farm in Oregon, which at a planned 338 turbines and 845 megawatts, would be the world’s largest land-based wind energy project. At the beginning of March, only days before construction was set to begin, DoD intervened, forcing New York City-based Caithness Energy, a privately held independent power producer that is developing the $2 billion Shepherds Flat project, to stop in its tracks.

Wind turbines, the Pentagon had belatedly decided, could interfere with the aging Air Force radar system in nearby Fossil, Ore., and that would be a security threat. DoD and the renewable energy developer were between a rock and a hard place, as the saying goes, neither knowing what to do.

DoD’s mission was clear. But so was the Obama administration’s and DoD’s own renewable energy policy. Moreover, the same clash between aging radar and spinning wind turbine blades could have scuttled three other large wind projects under development in the same region by Iberdrola Renewables, as well as proposed projects from the upper Midwest south to Texas.

The FAA denial of a permit halted Shephards Flat, which was already nine years in development; the Department of Energy stopped working on a loan-guarantee application for the project; and General Electric [GE] which, in December, received a $1.4-billion contract to supply the turbines for Shephards Flat–its largest renewable energy contract last year and the first for its advanced 2.5xl (2.5-MW) machines–was in manufacturing limbo.

To add even more to the dilemma, major construction delays threatened the financial underpinning for the project: Caithness Energy officials stressed that building the wind farm will take a year and a half, and it must be finished by the end of 2012 to remain eligible for Recovery Act stimulus funding.

That’s not to mention that Southern California Edison (SCE) is scheduled to begin taking power from the project toward the end of 2011 under the first of three 20-year power puchase agreements. Like all large California utilities, SCE must meet an ambitious renewable portfolio standard of getting 20 percent of its electricity from renewable sources by 2010 and 33 percent by 2020. Shephards Flat represents about 10 percent of the utility’s contracted renewable electricity.

The stalemate spurred further intervention, this time by the outraged Oregon Congressional delegation, led by Sen. Ron Wyden (D-Ore.) who, in discussions and negotiations with the Pentagon and top Obama administration officials, warned that blocking Shephard Flats would not only undermine that project’s promise of employment and financial gains for an economically down trodden region of Oregon, but would have an adverse ripple effect through the Obama administration’s entire renewable energy program.

After nearly two months of haggling back and forth, DoD, with little explanation, gave in and said it would not stand in the way of Shephard Flats. At the end of April, it withdrew its objections and FAA granted approval of the project. Triumphantly, Wyden said: “In allowing this project to go forward, both the White House and the Pentagon have underscored their commitment to U.S. energy security.

“As I have said throughout this effort, blocking this project would have had a chilling-effect not just on Shepherd’s Flat, but on private investment in new energy projects across the country. As a member of both the Senate Committees on Energy [and Natural Resources] and Intelligence, I am convinced that national security and energy security are not only compatible, they are one and the same.”

The radar-wind turbine clash is not new. Nobody has denied that wind turbines could cause radar interference, or “clutter,” at many air navigation facilities. But that is because, worldwide, much of the existing radar infrastructure is very old–analogue rather than digital–relies on outdated computer technology and has been patched together for decades while governments search for funding to replace it.

Air navigation systems and technology updates that resolve wind turbine issues have been available for more than 20 years. But there simply weren’t that many wind energy facilities until five to 10 years ago–when the national security threat of rising and erraditic oil prices and uncertain supplies emerged clearly. Now wind energy projects are proliferating across the United States and comparatively monster sized turbines are being moved offshore.

But little progress has been made coming to a resolution acceptable to all parties and all policies.

As part of the 2006 Defense Authorization Act, Congress required DoD to prepare a report on “Effects of Windmill Farms on Military Readiness,” including “an assessment of the effects on the operations of military radar installations of the proximity of windmill farms to such installations and of technologies that could mitigate any adverse effects on military operations identified.” In its conclusions to that report, DoD said, “The FAA has the responsibility to promote and maintain the safe and efficient use of U.S. airspace for all users. The Department defers to the FAA regarding possible impacts wind farms may have on the Air Traffic Control radars employed for management of the U.S. air traffic control system. The Department is prepared to assist the FAA in efforts the FAA may decide to undertake in this regard.”

Subsequently, the Mitre Corp. was asked by the Department of Homeland Security (DHS) to “review the current status of the conflict between the ever-growing number of wind-turbine farms and air-security radars that are located within some tens of miles of a turbine farm.”

In its January 2008 report, the company wrote, “Wind farms interfere with radar. This interference has led the FAA, the DHS, and the DoD to contest many proposed wind turbines in the line of sight of radar, stalling development of several thousands of megawatts of wind energy. A large number of such denials is a serious impediment to the nation’s mandated growth of sustainable energy.”

Mitre Corp. further concluded, “Current circumstances provide an interesting opportunity for improving the aging radar infrastructure of the United States by replacing radar that inhibits the growth of wind farms with new, more flexible and more capable systems, especially digital radar hardware and modern computing power. Such improvements could significantly increase the security of U.S. airspace.”

But the problem is still not resolved–at least not as a matter of consistent DoD policy–and apparently needs more studying, or so Congress believes. The fiscal year 2011 Defense Authorization Bill, now before the House and Senate, contains as paragraph headed, “Effects of Wind Turbines on Military Operations,” that seems vaguely to be calling for additional study:

“As the construction of wind farms across the nation has increased, new challenges associated with the obstruction of military training routes and radar are emerging. To address these issues and better balance our energy security and military readiness, the bill provides tools to the Department to identify potential conflicts and remedy them in a timely manner.”

The Pentagon, while agreeing not to further delay the Shephard Flats project, has not said publicly said what it plans to do about the aging radar system at Fossil, Ore. But congressional officials confirmed that DoD will pay to replace it, which needed to be done long ago anyway.

Not so for Cape Wind, however. It will have to pay–for a technology upgrade or possibly for an entirely new radar system. And there is no guarantee either will work. said, “The guys at FAA have pretty good confidence that this will do the trick,” said Cape Wind’s Rodgers, “but they want to cover themselves.”

Enter Lockheed Martin [LMT]. In mid-April, just as DoD was backing down at Shephards Flat, the U.S. defense contractor announced that it will be supplying an advanced radar system for a U.K. Ministry of Defense installation.

MoD is not modernizing its radar systems, however. They are not outdated, but they were not designed to see through or around the interference, or “clutter,” that large offshore wind turbines would likely cause, creating blind spots in air defenses. And MoD was refusing to sign off on developers’ plans for a total of 924 wind turbines, generating 5,500 megawatts, in five offshore wind farms situated in the Greater Wash Strategic Area to the east.

As is in the United States, energy security ran head on into national security in the United Kingdom. MoD refused to approve the massive project until a tested solution to the radar clutter problem was in hand.

This is the first of two parts. The conclusion will follow next week.