Rhode Island Energy says it won’t move forward on offshore wind energy bid - The Boston Globe
Rhode Island Energy says it won’t move forward on offshore wind energy bid - The Boston Globe
PROVIDENCE — Rhode Island Energy says it won’t move forward on a power-purchase agreement for a joint Ørsted and Eversource proposal to build a major offshore wind project in the waters off Rhode Island, in part because it would be too expensive for customers.
The utility made the announcement Tuesday. It found that the proposal, called Revolution Wind 2, didn’t meet all the requirements under state law, including a requirement “to reduce energy costs.”
“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,” Dave Bonenberger, president of Rhode Island Energy, said in announcing the decision Tuesday. “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.”
The utility said the decision came after a four-month evaluation of the proposal. The evaluation happened in consultation with the state Office of Energy Resources and Division of Public Utilities and Carriers, according to Rhode Island Energy. The joint proposal from Ørsted and Eversource was the only one to respond to a solicitation for wind power projects, and the fact that even that one won’t get picked is a sign of ongoing challenges in the wind power industry.
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Rhode Island Energy said “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.”
In other wind power news, a different project — Revolution Wind— took a significant step forward when the federal Bureau of Ocean Energy Management announced it had completed its environmental analysis. Revolution Wind would be the first major offshore wind project to bring its power directly to Rhode Island. BOEM said it’s planning to have a decision on whether to approve, reject, or approve the project with modifications.
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“With Rhode Island Energy’s announcement of its decision not to move forward with the proposal from the latest offshore wind procurement RFP, the McKee Administration remains committed to offshore wind and securing a third offshore wind project for our state energy system under the Affordable Clean Energy Security (ACES) Act,” the McKee administration said in a written statement.
Brian Amaral can be reached at brian.amaral@globe.com. Follow him on Twitter @bamaral44.
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.