State to join neighbors in seeking offshore wind power contracts - theday.com
State to join neighbors in seeking offshore wind power contracts
Buy Photo Reprints
New London ― Two days after losing a contract for power from the state’s largest planned offshore wind farm, the state is seeking to boost its goal of capturing affordable offshore wind power by partnering with neighboring states.
Gov. Ned Lamont announced Wednesday that Connecticut has signed an agreement with officials in Rhode Island and Massachusetts to collectively solicit new offshore wind project proposals in a multi-state approach designed to leverage buying power.
State Department of Energy and Environmental Protection Commissioner Katie Dykes joined Lamont for the announcement of a first-of-its kind memorandum of understanding Wednesday during a news conference at State Pier in New London, which is being used for a staging and assembly hub for the South Fork Wind project under construction off the coast of Long Island.
On Monday, Avangrid, developer of the 800-megawatt Park City Wind project, announced it was terminating a 2019 agreement with Connecticut utility companies to buy power because costs have become prohibitive. Avangrid agreed to pay $16 million in penalties to terminate the contract. Other offshore wind companies have sought to renegotiate power purchase contracts as they cope with higher costs of building the projects due to inflation, supply chain issues and high interest rates.
But Dykes and Lamont, joined by a state legislators and representatives from the offshore wind industry, said they remain optimistic about bringing renewable energy to the state despite the challenges.
Dykes said this new memorandum could help the states coordinate the selection of “multi-state” offshore wind proposals, reducing costs by developing larger projects that deliver power to more than one state at a time.
The three states are collectively seeking up to 6,000 megawatts of offshore wind power in 2024. Any two or three states could agree to select a multi-state proposal and split the power from the projects.
“It’s something we’ve talked about for a long time. All of our states share strong commitments to offshore wind. We know how important is to meeting our clean energy targets. We also increasingly know how important it’s going to be, and is, for maintaining the reliability of our grid,” Dykes said.
In a joint statement with the governors of Massachusetts and Rhode Island, Lamont said with the agreement there is potential for the state to “procure clean energy from offshore wind together at more competitive and affordable rates.”
“The climate crisis requires us to act in new an innovative ways,“ Massachusetts Gov. Maura Healey said. ”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.“
The multi-state agreement is between the DEEP, Massachusetts Department of Energy Resources and the Rhode Island Office of Energy Resources. DEEP is currently developing a final request for proposals for the next bid offering for offshore wind and is expected to release that in the coming weeks, Dykes said.
Lamont also announced Wednesday the publication of the state’s first strategic road map for economic development in the the offshore wind industry, to be supported by a new nonprofit group known as the Connecticut Wind Collaborative.
Connecticut has an existing contract for 304 megawatts of power from Revolution Wind, a project being developed by Danish wind company Ørsted and Eversource and also staged in New London. Ørsted has signaled that some of its planned projects could be delayed or scrapped altogether without help from the federal government.
On Wednesday, Ørsted’s head of government affairs and market strategy for the northeast, David Ortiz, said Ørsted plans to start offshore construction on its ongoing projects in the new year but could not offer a guarantee on the development of Revolution Wind.
“We continue to believe the future of this industry in the U.S. is bright and in the short term have to pull together to address these challenges,” Ortiz said.
Comments are limited to 200 words in length.
Total word count: 0 words. Words left: 200.
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.