Governor Deval Patrick yesterday announced that National Grid and Cape Wind have agreed to enter into negotiations for a long-term contract under which the utility would purchase the electricity generated by Cape Wind.

A “power purchase” agreement would be a critical requirement for financing the proposed wind farm in Nantucket Sound, and getting it into construction and operation in time to qualify for federal incentives under the American Recovery and Reinvestment Act that would reduce the cost of the project by 30 percent, according to a press release.

“For both reducing greenhouse gas emissions and launching the offshore wind industry that will achieve those reductions, it is essential for Cape Wind, like offshore wind in general, to move from wishful thinking to reality,” said Governor Patrick in a press release. “A contract with an electric distribution utility like National Grid will move Cape Wind one step closer to reality.”

The power purchase arrangement still has to go through state regulatory review.

National Grid is expected to file shortly with the state Department of Public Utilities a memorandum of understanding with Cape Wind laying out the rationale for such a contract, as well as the methods and timelines by which the parties will pursue an agreement. If DPU gives approval to the process, National Grid and Cape Wind will engage in negotiations to enter into a mutually agreeable long-term contract and submit any final pact to DPU for review and approval.

“The Green Communities Act called for long-term contracts to help renewable energy developers get their projects financed,” said Energy and Environmental Affairs Secretary Ian Bowles. “While these contracts can be arrived at in a variety of ways, a smart, well-structured agreement to purchase the power generated by the nation’s first offshore wind farm, located just miles off the Massachusetts shore, will promote renewable energy and replace fossil-fuel power plants with emissions-free power.”