Bid award is part of coordinated procurement effort with Massachusetts
By Mary Lhowe / ecoRI News contributor
Rhode Island selected 200 megawatts (MW) from the SouthCoast Wind project,
by developer Ocean
Winds, a 50-50 joint venture between EDP Renewables and ENGIE. Construction
on the project is expected to start in 2025 and to deliver power by 2030.
Massachusetts selected 2,678 MW of power from three
projects. They will include 1,087 MW from SouthCoast Wind; 791 MW from New England Wind 1 (formerly
called Park City Wind), built by the developer Avangrid; and 800 MW
from Vineyard Wind 2, built by the developer Vineyard Offshore.
For comparison, the 65 turbines of Revolution Wind, now
under construction off Rhode Island’s coast, will produce 704 MW to be shared
by Rhode Island and Connecticut, enough to power 350,000 homes.
Through the new procurement, offshore wind will power more
than 125,000 Rhode Island homes and 1.4 million Massachusetts homes, according
to state officials. One megawatt equals 1,000 kilowatts. A typical Rhode Island
home uses 500 kilowatt-hours a month.
Rhode Island officials lauded the importance of the projects in creating renewable energy and reducing the use of fossil fuels. “With this project, Rhode Island is taking a significant step forward in meeting our Act on Climate goals,” Gov. Dan McKee said.
Connecticut was part of the three-state agreement to
coordinate RFPs for offshore wind, but it made no announcements on Sept. 6. A
spokesperson for the Connecticut Department of Energy and Environmental
Protection said, “The evaluation of project bids remains under way in
Connecticut and we will announce a final decision in our solicitation at a
future date.”
Rhode Island and Massachusetts officials said it wasn’t
feasible at this point to give information about prices and costs for the
utilities and ratepayers since those are matters that will be hammered out in
contract negotiations between the developers, utilities, and state regulators.
“We are limited in what information we can say as a lot of
it will be subject to contract negotiations,” said Caroline Pretyman, a
spokesperson for Rhode Island Energy.
Details of the SouthCoast contract, including pricing, will
be open to the public when the contracts, still to be negotiated, are filed
with the Rhode Island Public Utilities Commission, probably in December.
In a statement, SouthCoast said it would place its turbines
at the New Bedford Marine Commerce Terminal; conduct operations and maintenance
at Foss Terminal in New Bedford; and open a crew transfer and administrative
hub in Rhode Island.
“SouthCoast Wind’s project represents one of the largest
ever energy investments in southern New England and will revitalize Brayton
Point, a former coal-fired power plant,” according to the company.
Construction is expected in late 2025, and will begin once
SouthCoast has received all federal, state, and local permits, and pending
final investment decision.
In answer to a question, officials said it wasn’t unusual
for a developer such as SouthCoast to not have investors in place at this
stage.
Rebecca Ullman, director of external affairs for SouthCoast
Wind, said, “In order to secure financing, all of the project’s development
risk has to be closed. The PPA [power purchase agreement] today closes a
significant development risk. The final risks are the permits; SouthCoast Wind
has been working on its federal, state, and local permits since 2019 and
expects to finalize them in 2025. Once SouthCoast Wind has secured its permits,
it will be ready to secure financing.”
Rhode Island’s selection of 200 MW of power is only
one-sixth of the 1,200 MW that the state indicated it would like to obtain at
the time the RFP was issued last fall.
Asked if the low amount of power that Rhode Island selected,
compared to the state’s original stated intention, was a problem, an official
with the Office of Energy Resources (OER) said Rhode Island Energy did a
thorough review of the proposals and determined that the 200 MW “was the best
opportunity” for Rhode Island. A written statement from OER said, “This
selection balanced Rhode Island’s climate change objectives, renewable energy
obligations, economic development opportunities, energy system benefits, and
energy costs.”
Rhode Island Energy’s Pretyman said, “We collaborated … to
conduct a thorough review of the proposals and decided this was the best fit
for this offshore wind RFP.”
OER also said Rhode Island would be issuing another RFP for
offshore wind power soon, probably in 2025. “We remain committed to pursuing
additional offshore wind procurements for Rhode Island, in partnership with
neighboring states, to meet our long-term goals,” according to the state
agency.
During the Sept. 6 online press conference, an OER official
was asked whether the state had any qualms about dealing with SouthCoast Wind
because of the strained relationship between the state and the developer over
the past few years.
As of early fall 2022, Southcoast Wind, originally named
Mayflower Wind, had agreements with the Massachusetts Department of Public
Utilities to build a 2,400-MW project to provide power to the Massachusetts
grid. The turbines were slated to occupy a 199-square-mile lease area 20 miles
south of Nantucket, Mass.
Part of the project would have run cables from the ocean
turbines below the bottom of the Sakonnet River in Rhode Island waters. The
cables would then have run underground across Portsmouth before exiting in
Mount Hope Bay to meet the grid at Brayton Point in Somerset, Mass. Cables
under the Sakonnet River riled fishermen and local boaters, who had no
hesitation about voicing their opposition.
By mid-fall 2022, SouthCoast Wind had decided to withdraw
from its power-purchase agreements with Massachusetts, claiming the project
wasn’t economically viable. Around that period, a combination of inflated costs
and high interest rates were putting pressure on SouthCoast and other offshore
wind projects, including other projects that developers had to abandon.
SouthCoast said at the time that it would bid for future contracts with better
terms.
In June 2023 SouthCoast paid a penalty of $60 million to
terminate the contracts. Ullman, spokesperson for SouthCoast Wind, said at the
time, “Covid-related supply chain disruptions, rising interest rates, and the
war in Ukraine made the contracts unfinanceable.”
In July of that year, the Rhode Island Energy Facility
Siting Board (EFSB) voted to take no action on the application of SouthCoast
Wind until Oct. 1 of this year or until SouthCoast obtained new financing
agreements for its proposed wind project. That vote by the board also followed
a prolonged kerfuffle between SouthCoast and one staff member of the Coastal
Resources Management Council, along with CRMC’s Fishermen’s Advisory Board.
In August 2023, SouthCoast asked Rhode Island Supreme Court
to overturn the siting board’s decision to pause consideration of its
application.
On Friday, when the new procurements were announced, an OER
official indicated that state officials were confident that the new
relationship would work.
During the Friday press conference, Rebecca Tepper,
secretary of the Massachusetts Executive Office of Energy and Environmental
Affairs, offered assurances about the safety of the wind turbines in answer to
a question about a blade that broke and fell in July from a Vineyard Wind
turbine. Pieces of debris washed onto Nantucket and Rhode Island beaches and
the incident amplified the voices of people who oppose offshore wind
development.
Tepper said the blade failure was the result of a mistake
during manufacturing, and “extra oversight” was being done to assure that such
a mistake would not happen again. She said blades made at the same facility,
either in turbines or on the ground, are all being examined for possible
problems.
“Offshore wind is one of the safest forms of energy,” Tepper
said. “We have had devastating problems with fossil fuel [facilities].”
All three projects intend to use project labor agreements
and to create thousands of jobs and direct investments in the regional economy.
All of New England’s purpose-built offshore wind ports — Port of Providence,
New Bedford and Salem, Mass., and New London, Conn. — will have tenants through
2032 as a part of this selection, according to the developers and state
officials.
The SouthCoast Wind project is expected to provide 3,915
high-paying jobs in Massachusetts and Rhode Island and will invest in programs,
including training partnerships with Bristol Community College/National
Offshore Wind Institute and the Massachusetts Maritime Academy.
Avangrid’s New England Wind 1 project is expected to create
4,400 full-time equivalent jobs. The project will provide $130 million for the
development of the offshore wind port in Salem and will locate an operations
and maintenance hub in New Bedford, according to state officials. Construction
could begin in 2025, with an expected operations date in 2029.
The Vineyard Wind 2 project is expected to generate 3,800
job-years of employment across New England, with 80% in Massachusetts. The
project will also provide up to $37.5 million in directly funded initiatives,
according to state officials. The Salem Offshore Wind Terminal will be the
staging site for the project’s wind turbine installation and operations and
maintenance will be done from New Bedford.
The new offshore wind facility will be the third such
development with a direct relationship to Rhode Island. The Block Island Wind
Farm, a 30-MW, five-turbine project built by the Danish company Ørsted and
finished in 2016, was the first and, for years, the only offshore wind facility
in U.S. waters.
Last fall, final approvals from federal and state agencies
came through for Revolution Wind, a 65-turbine, 704-MW offshore project by
Ørsted and Eversource that will supply power to Rhode Island and
Connecticut. The first Revolution turbine went into the water last month,
even as the company said full operations would be pushed back to 2026 from 2025
because of unexpected delays with onshore facility construction.
A bit further away, South Fork Wind, the 12-turbine project developed by Ørsted
and Eversource off the end of Long Island, N.Y., began operating in March,
sending up to 132 MW of electricity to New York. And Vineyard Wind, an
800-MW project of Avangrid and Copenhagen Infrastructure Partners, is being
built and beginning to operate in the waters south of Martha’s Vineyard.
