US states delay offshore wind tenders
US states delay offshore wind tenders | Windpower Monthly
Massachusetts, Connecticut and Rhode Island have delayed the deadlines for their request for proposals for offshore wind from 31 January to 27 March.
Project selection will now occur around two months later, by 7 August, with contracts finalised by 9 October, the states added.
"Extending the schedule for our current solicitation creates additional time for developers to react to the possibility of further guidance from the (US Internal Revenue Service) regarding key tax credits available to offshore wind projects," a spokeswoman at the Massachusetts Department of Energy Resources told Windpower Monthly.
"We know the importance of capturing all available savings for Massachusetts customers, and federal tax credits are essential to lowering the price of offshore wind for our ratepayers and improving project viability for offshore wind developers," she continued.
Firms that might bid in the three states’ offshore wind tenders include joint ventures that have exited power purchase agreements (PPAs), such as Avangrid, BP, EDP, Engie, Equinor, Ørsted and Shell.
In October, auction regulators from the three states had signed a memorandum of understanding to coordinate their selections of offshore wind projects.
Planned offshore wind projects have struggled in the US with inflation, supply chain bottlenecks and slow permitting. Because of this, some developers have exited PPAs with states, claiming they had become uneconomic.
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.