3 New England states join together for offshore wind power projects, aiming to lower costs - Boston.com
3 New England states join together for offshore wind power projects, aiming to lower costs
The partnership could lead to the three states acquiring clean energy at more competitive and affordable rates, Connecticut Gov. Ned Lamont said.
Massachusetts, Connecticut and Rhode Island will procure future wind energy projects together rather than separately as part of a joint agreement the states’ governors announced Wednesday — the first such multi-state agreement in the nation.
The partnership could lead to the three states acquiring clean energy at more competitive and affordable rates, Connecticut Gov. Ned Lamont said. Energy from off-shore wind projects is seen as key to meeting each states’ climate change goals.
“We can go further when we work together,” said Lamont, a Democrat.
The new multistate agreement, which could become a model for other parts of the country, comes as some offshore wind developers are seeking to renegotiate contracts they signed with states in 2019 and 2020 when costs were lower. Those costs include the price of steel needed for wind turbines and higher interest rates.
This week, electric utility Avangrid announced it was pulling out of Connecticut’s largest offshore wind project, Park City Wind, calling the current terms “unfinanceable.” Lamont said the state plans to seek bids again for the project in early 2024.
Energy developers will have until January to submit proposals to be considered for multi-state offshore wind projects that can generate up to 6,000 megawatts. Under the agreement, any two or three states will be able to choose a multi-state proposal and split up the anticipated energy.
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.