2nd wind developer moves to terminate its contracts off Martha's Vineyard
Another offshore wind developer took a major step Tuesday toward scrapping its initial plans for an installation in waters off the coast of Martha’s Vineyard. SouthCoast Wind, whose pair of successful bids represented a combined 1,200 megawatts of anticipated offshore wind power, agreed to pay utility companies $60 million to terminate contracts the parties previously struck for the clean energy. The penalty would be divided into $32.4 million for Eversource, $27.3 million for National Grid and $591,000 for Unitil, according to contract amendments filed with the Department of Public Utilities. The utility companies would then credit the payments to their ratepayers through contract adjustments. Get Boston local news, weather forecasts, lifestyle and entertainment stories to your inbox. Sign up for NBC Boston’s newsletters. The move makes official the developer’s attempt to cancel existing contracts after months of warning that the project was no longer financially viable under the negotiated prices as a result of economic trends. Like Commonwealth Wind, another developer whose termination agreement won approval from state regulators last week, SouthCoast Wind officials have signaled they plan to resubmit a bid for the project in the next state solicitation, hoping to secure a higher price for their project and its energy. The Department of Public Utilities will still need to give the green light to SouthCoast Wind’s proposed termination agreement. Sign up for our to get the most urgent news stories in your inbox. Breaking newsletter If regulators sign off, the amount of already-approved offshore wind energy in the state’s pipeline would drop to just 800 megawatts after hitting a high of 3,200 megawatts. The Healey administration is seeking between 400 megawatts and 3,600 megawatts in the next round of bidding set to open early next year. Massachusetts must secure 5,600 megawatts by 2027 to comply with a state clean energy law. CommonWealth Magazine first rep o rted about the SouthCoast Wind termination agreement.
Related Knowledge Center: Offshore wind energy
Over the next decade, U.S. offshore wind power is expected to grow from a single 30-megawatt wind farm off Rhode Island to more than 2,000 MW of capacity along the Atlantic Seaboard. There are contracts for wind power off the coasts of Massachusetts, Connecticut, New York, Maryland, New Jersey, Rhode Island, and Virginia.
The National Renewable Energy Laboratory has estimated the United States has over 4,000 gigawatts (GW) of offshore wind potential, enough to power the country four times over.
The growth in part being spurred by state solicitations, including in New York, where then-Gov. Andrew Cuomo (D) set a commitment of 9,000 MW of offshore wind by 2035, and in Connecticut, where in June 2021, Gov. Ned Lamont (D) signed legislation authorizing the construction of 2,000 MW of offshore wind by 2030.
The offshore development is also being driven by an investment tax credit set to end in December 2019 and is equal to 12 percent of expenditures. U.S. Sens. Susan Collins (R-Maine) and Tom Carper (D-Del.) have introduced a bill to extend the tax credit for up to eight years.
The Interior Department has held eight competitive lease sales that resulted in 15 offshore wind leases over 1.7 million acres that has the potential for 21 GW of capacity. In February 2022, the Bureau of Ocean Energy Management completed a bidding process that realized $4.37 billion for 488,000 acres across six lease areas in federal waters off New York and New Jersey.
Projects have also been proposed off the Southeast coast, off California and Hawaii, and for the Great Lakes.