Massachusetts energy agency calls for 3,600 MW of offshore wind proposals in state’s largest RFP to date
Massachusetts energy agency calls for 3,600 MW of offshore wind proposals in state’s largest RFP to date | Utility Dive
Dive Brief:
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The Massachusetts Department of Energy Resources and the state’s electric distribution companies
filed a draft Request for Proposals on Tuesday that seeks up to 3,600 MW of offshore wind projects.
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If approved by the Massachusetts Department of Public Utilities, the RFP will be the state’s largest procurement of offshore wind energy. The procurement could supply 25% of the state’s annual electricity demand, according to the DOER.
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However, the filing has raised questions about additionality and whether some of the 3,600 MW will go to companies looking to re-bid existing projects they say are no longer financially viable.
Dive Insight:
DOER is scaling up its renewable energy ambitions—and perhaps looking to recoup some of the losses associated with growing financial strain in the offshore wind industry.
The RFP calls for significantly more offshore wind energy than the state has sought in prior solicitations. The state’s most recent round of procurement, its third, sought 1,600 MW of offshore wind.
“We are excited to announce the first offshore wind procurement of our administration—the biggest in our region’s history,” said Gov. Maura Healey, who took office in January. “This draft RFP is a signal to the rest of the world that Massachusetts is all-in on offshore wind and ready to be the industry’s hub. Our proposal is also a commitment to Massachusetts ratepayers to chase after all clean energy for our homes and businesses.”
The RFP aims to max out the DOER’s statutory authority to procure offshore wind energy, according to the agency. The 1,200 MW Commonwealth offshore wind farm owned by AVANGRID is currently tied up in court pending an appeal of a ruling that approved the development despite evidence submitted by the wind farm that the project was no longer financially viable.
Absent that project, Massachusetts currently has 2,000 MW of offshore wind under contract and authority to procure up to 5,600 MW, according to the DOER.
The new RFP will allow bidders to use indexed pricing to increase the flexibility of future projects, although details of the index have yet to be released, according to the DOER. Bidders must also explain how their projects will benefit economic development in Massachusetts, including environmental justice initiatives, and should explain how they’d make use of available grants, tax credits and other government incentives, the draft RFP said. The RFP anticipates a due date of January 2024 for bids.
The draft RFP was well-received by offshore wind industry officials. AVANGRID spokesperson Craig Gilvarg commended the governor’s office for “its commitment to building a robust offshore wind industry in the Commonwealth.” In response to questions about whether the RFP might present an opportunity to re-bid the Commonwealth wind farm project, Gilvarg indicated that the company is reviewing the draft RFP.
Carol Oldham, northeast director at the Business Network for Offshore Wind, also praised the solicitation.
“Massachusetts ... joins a growing list of states that [is] making bold commitments to offshore wind this year that will drive substantial new investments into the U.S. manufacturing sector and foster development of a sustainable supply chain,” she said.
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.