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Researched by Industrial Info Resources (Sugar Land, Texas)--Rhode Island Energy, the state's largest utility company, said Tuesday it would not move forward on a long-term power purchase agreement (PPA) with Orsted A/S (Fredericia, Denmark) and Eversource Energy Incorporated (NYSE:ES) (Boston, Massachusetts) for the companies' Revolution Wind II joint offshore project. The utility said the proposal was too costly for customers.
Rhode Island Energy said the joint proposal from Orsted and Eversource was the only bid it received in response to its request for proposals (RFP) that was issued in October 2022. The RFP looked to solicit an additional 600 to 1,000 megawatts of offshore wind to help meet the state's clean energy goals.
However, the proposal did not meet the requirement of the state's Affordable Clean Energy Security Act to reduce energy costs and other factors that scored low in a four-month evaluation of the proposal, according to Rhode Island Energy.
"The economic development benefits included in the proposal were weighted and valued appropriately by our evaluation team, but ultimately it was determined those features did not outweigh the affordability concerns and other ACES standards," said Rhode Island Energy President Dave Bonenberger in a press release.
Higher interest rates, increased costs of capital and supply-chain expenses, as well as the uncertainty of federal tax credits, all likely contributed to higher proposed contract costs, according to Rhode Island Energy, which added "those costs were ultimately deemed too expensive for customers to bear and did not align with existing offshore wind PPAs."
Subscribers to Industrial Info's Global Market Intelligence (GMI) Power project and plant databases can click here for a detailed project report and click here for the related plant profile.
"We recognize some will be disappointed that we didn't choose to move forward on negotiating this PPA, but that doesn't mean we are abandoning our commitment to offshore wind in Rhode Island," Bonenberger said, adding, "In fact, we are already in discussions with state and regional leaders about new opportunities to bring more offshore wind to the state, which we hope to progress in the coming months."
In the meantime, the company said it began transmission line upgrades this spring to support Orsted and Eversource's original Revolution Wind I project. A PPA for that project was signed in 2019. Subscribers can click here for more details on that project.
However, Eversource has signaled it plans to exit the offshore wind business and concentrate on core infrastructure capital spending. For more information, see June 21, 2023, article - Offshore No More? Eversource Makes Plans to Exit Offshore Wind Business.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 Trillion (USD).
Rhode Island Energy said the joint proposal from Orsted and Eversource was the only bid it received in response to its request for proposals (RFP) that was issued in October 2022. The RFP looked to solicit an additional 600 to 1,000 megawatts of offshore wind to help meet the state's clean energy goals.
However, the proposal did not meet the requirement of the state's Affordable Clean Energy Security Act to reduce energy costs and other factors that scored low in a four-month evaluation of the proposal, according to Rhode Island Energy.
"The economic development benefits included in the proposal were weighted and valued appropriately by our evaluation team, but ultimately it was determined those features did not outweigh the affordability concerns and other ACES standards," said Rhode Island Energy President Dave Bonenberger in a press release.
Higher interest rates, increased costs of capital and supply-chain expenses, as well as the uncertainty of federal tax credits, all likely contributed to higher proposed contract costs, according to Rhode Island Energy, which added "those costs were ultimately deemed too expensive for customers to bear and did not align with existing offshore wind PPAs."
Subscribers to Industrial Info's Global Market Intelligence (GMI) Power project and plant databases can click here for a detailed project report and click here for the related plant profile.
"We recognize some will be disappointed that we didn't choose to move forward on negotiating this PPA, but that doesn't mean we are abandoning our commitment to offshore wind in Rhode Island," Bonenberger said, adding, "In fact, we are already in discussions with state and regional leaders about new opportunities to bring more offshore wind to the state, which we hope to progress in the coming months."
In the meantime, the company said it began transmission line upgrades this spring to support Orsted and Eversource's original Revolution Wind I project. A PPA for that project was signed in 2019. Subscribers can click here for more details on that project.
However, Eversource has signaled it plans to exit the offshore wind business and concentrate on core infrastructure capital spending. For more information, see June 21, 2023, article - Offshore No More? Eversource Makes Plans to Exit Offshore Wind Business.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 Trillion (USD).
