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Researched by Industrial Info Resources (Sugar Land, Texas)--In an effort to cut costs, Massachusetts, Rhode Island and Connecticut said Wednesday they've signed a memorandum of understanding (MOU) that could lead to multistate procurement for offshore wind.
Industrial Info is tracking 15 active offshore wind projects in New England with a total investment value of more than $29 billion. Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Project Database can click here for a list of detailed project reports.
"Through this MOU, the three states will together seek multi-state offshore wind proposals that would expand benefits for the region, capture cost reductions by developing projects at scale, and develop into viable projects. In coordinating, the states will amplify efforts to foster regional economic development, create high-paying, in-demand jobs, and promote environmental justice and equity," the states said in a joint press release. Offshore wind developers would submit multi-state offshore wind project proposals for selection in 2024.
Combined, the states plan to solicit bids for as much as 6,000 megawatts (MW).
"By working together, we can amplify the many benefits of offshore wind for all three states, including regional economic development opportunities, healthier communities, lower energy bills, and advantages to environmental justice populations and low-income ratepayers," Massachusetts Governor Maura Healey (D) said in the press release.
The announcement comes at a time when offshore wind developers are facing challenges due to cost issues. On Tuesday, Avangrid Incorporated (NYSE:AGR) (Orange, Connecticut), part of the multinational Iberdrola S.A. (Bilbao, Spain), said it filed agreements with the Connecticut Electric Distribution Companies to terminate power purchase agreements for the Park City Wind offshore project.
"One year ago, Avangrid was the first offshore wind developer in the United States to make public the unprecedented economic headwinds facing the industry including record inflation, supply-chain disruptions, and sharp interest rate hikes, the aggregate impact of which rendered the Park City Wind project unfinanceable under its existing contracts," Avangrid said in a press release.
The company continued: "After exploring all potential solutions to the financial challenges facing the project, and engaging in good-faith and productive discussions with Connecticut state officials regarding these challenges, it is clear the best path forward for Park City Wind is in the termination of the Power Purchase Agreements and a rebid of the project."
Avangrid will pay more than $16 million in termination fees, according to news accounts.
The Park City Wind project would generate up to 804 MW, supplying 14% of Connecticut's electricity and avoiding more than 25 million tonnes of carbon emissions, according to its developers. Subscribers can click here to learn more about the project.
Also, Massachusetts regulators have approved a proposal by the developers of the SouthCoast Wind offshore project to terminate its power purchase agreements. The 1,209-MW windfarm's developers will pay $60 million in termination fees, with the goal of rebidding the project at more favorable prices. Located in U.S. federal waters south of Martha's Vineyard, the project is a joint venture of Shell plc (NYSE:SHEL) (London, England) and Ocean Winds, itself a joint venture of EDP Renewables (Madrid, Spain) and ENGIE (La Défense, France). Construction is planned to begin in the mid-2020s and would take an estimated 26 months. Subscribers can click here to learn more about the related projects.
In July, Rhode Island's largest utility company, Rhode Island Energy, ended a long-term power purchase agreement with Orsted A/S (Fredericia, Denmark) and Eversource Energy Incorporated (NYSE:ES) (Boston, Massachusetts) that would have allowed the 300-MW Revolution Offshore Windfarm II project to move forward. Rhode Island Energy cited affordability concerns. For more on the project, click here. For related information, see July 20, 2023, article - Rhode Island Utility Rejects Proposed Offshore Wind Project.
Not all of New England's offshore wind projects face such challenges. Construction on Avangrid's Vineyard Wind 1 project off the Massachusetts coast continues. Completion of the 400-MW project is planned for the second quarter of 2024. Subscribers can learn more from a detailed project report. For related information, see August 2, 2023, article - U.S. Offshore Wind Gains Ground, but Far Behind Global Peers.
Subscribers to Industrial Info's GMI Power Database can click here for all project reports mentioned in this article and click here for the related plant profiles.
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).
Industrial Info is tracking 15 active offshore wind projects in New England with a total investment value of more than $29 billion. Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Project Database can click here for a list of detailed project reports.
"Through this MOU, the three states will together seek multi-state offshore wind proposals that would expand benefits for the region, capture cost reductions by developing projects at scale, and develop into viable projects. In coordinating, the states will amplify efforts to foster regional economic development, create high-paying, in-demand jobs, and promote environmental justice and equity," the states said in a joint press release. Offshore wind developers would submit multi-state offshore wind project proposals for selection in 2024.
Combined, the states plan to solicit bids for as much as 6,000 megawatts (MW).
"By working together, we can amplify the many benefits of offshore wind for all three states, including regional economic development opportunities, healthier communities, lower energy bills, and advantages to environmental justice populations and low-income ratepayers," Massachusetts Governor Maura Healey (D) said in the press release.
The announcement comes at a time when offshore wind developers are facing challenges due to cost issues. On Tuesday, Avangrid Incorporated (NYSE:AGR) (Orange, Connecticut), part of the multinational Iberdrola S.A. (Bilbao, Spain), said it filed agreements with the Connecticut Electric Distribution Companies to terminate power purchase agreements for the Park City Wind offshore project.
"One year ago, Avangrid was the first offshore wind developer in the United States to make public the unprecedented economic headwinds facing the industry including record inflation, supply-chain disruptions, and sharp interest rate hikes, the aggregate impact of which rendered the Park City Wind project unfinanceable under its existing contracts," Avangrid said in a press release.
The company continued: "After exploring all potential solutions to the financial challenges facing the project, and engaging in good-faith and productive discussions with Connecticut state officials regarding these challenges, it is clear the best path forward for Park City Wind is in the termination of the Power Purchase Agreements and a rebid of the project."
Avangrid will pay more than $16 million in termination fees, according to news accounts.
The Park City Wind project would generate up to 804 MW, supplying 14% of Connecticut's electricity and avoiding more than 25 million tonnes of carbon emissions, according to its developers. Subscribers can click here to learn more about the project.
Also, Massachusetts regulators have approved a proposal by the developers of the SouthCoast Wind offshore project to terminate its power purchase agreements. The 1,209-MW windfarm's developers will pay $60 million in termination fees, with the goal of rebidding the project at more favorable prices. Located in U.S. federal waters south of Martha's Vineyard, the project is a joint venture of Shell plc (NYSE:SHEL) (London, England) and Ocean Winds, itself a joint venture of EDP Renewables (Madrid, Spain) and ENGIE (La Défense, France). Construction is planned to begin in the mid-2020s and would take an estimated 26 months. Subscribers can click here to learn more about the related projects.
In July, Rhode Island's largest utility company, Rhode Island Energy, ended a long-term power purchase agreement with Orsted A/S (Fredericia, Denmark) and Eversource Energy Incorporated (NYSE:ES) (Boston, Massachusetts) that would have allowed the 300-MW Revolution Offshore Windfarm II project to move forward. Rhode Island Energy cited affordability concerns. For more on the project, click here. For related information, see July 20, 2023, article - Rhode Island Utility Rejects Proposed Offshore Wind Project.
Not all of New England's offshore wind projects face such challenges. Construction on Avangrid's Vineyard Wind 1 project off the Massachusetts coast continues. Completion of the 400-MW project is planned for the second quarter of 2024. Subscribers can learn more from a detailed project report. For related information, see August 2, 2023, article - U.S. Offshore Wind Gains Ground, but Far Behind Global Peers.
Subscribers to Industrial Info's GMI Power Database can click here for all project reports mentioned in this article and click here for the related plant profiles.
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).
