McKee moves slowly on wind
By Nancy Lavin, Rhode Island Current
Kind of.
The tentative contract announced Friday between Rhode Island, Massachusetts and developers of the SouthCoast Wind project will bring another 200 megawatts of wind-generated electricity to the Ocean State, providing enough electricity to power 125,000 homes if operating at full capacity.
Gov. Dan McKee in a statement lauded the award as a “historic milestone” that advances Rhode Island’s decarbonization goals.
But the tentative agreement represents just 16% of the amount of 1,200-megawatt maximum the state put out to bid.
“It’s certainly not as much as we had hoped for in Rhode Island,” said Amanda Barker, clean energy program coordinator for Green Energy Consumers Alliance.
And not for lack of choice.
The bid administered by Rhode Island Energy, which closed in March, drew four project proposals representing more than three times the total electricity Rhode Island hoped to buy.
Chris Kearns, acting commissioner for the Rhode Island Office of Energy Resources, said SouthCoast’s project offered the best benefits of the four proposals, including in its costs to ratepayers.
“There were some challenges we were mindful of in terms of federal interest rates, and the landscape of offshore wind,” Kearns said in an interview Friday. “We had to strike a balance.”
Rising costs and supply chain snafus have plagued the nascent offshore wind industry in recent years. Several project developers, including the company behind SouthCoast Wind, have walked away from signed agreements with utility companies in an attempt to secure new contracts reflecting rising project costs.
Project pricing was not included in publicly submitted materials. If a contract between the state and the SouthCoast Wind developer is finalized, details, including the proposed cost to ratepayers, will be submitted as part of the review by the Rhode Island Public Utilities Commission.
A prior attempt by Rhode Island Energy in 2023 to buy more offshore wind power was canceled after the only submission, from Danish wind giant Ørsted A/S, was deemed too expensive relative to environmental and economic benefits.
In its second bidding attempt, Rhode Island teamed up with Massachusetts and Connecticut, coordinating their respective solicitations under a first-of-its-kind tri-state agreement intended to leverage bulk buying power and encourage developers to build larger projects.
But the regional strategy also may have also created internal competition among the three states, whose combined 6,800-megawatt solicitation exceeded the amount developers proposed to build.
“There was certainly a dialogue in terms of, you have this pie, and how does it get distributed,” Kearns said. “You see that reflected in the SouthCoast Wind award.”
Ocean Winds, the Spanish developer behind the 1,287-megawatt SouthCoast Wind project planned south of Martha’s Vineyard, pitched its project to all three states. The new deal struck with Massachusetts and Rhode Island funnels the bulk of the wind farm power — 1,087 megawatts — to the Commonwealth, with the remaining 200 megawatts sold to Rhode Island.
Two other proposals submitted to Rhode Island, a 1,200-megawatt array from the co-developers of the Vineyard Wind project, and an 800-megawatt project by Avangrid Renewables, LLC, one of the Vineyard Wind co-developers, were wholly or partially selected in Massachusetts.
Kearns declined to comment on why Rhode Island passed over the proposals.
However, he acknowledged that the July 13 blade failure, in which a 300-foot-long blade broke off one of the Vineyard Wind turbines, was considered during the selection process. The blade failure, deemed a manufacturing error in preliminary review, remains under investigation by federal agencies.
Also not chosen in Rhode Island was the submission by Ørsted U.S., which is already under contract to sell 400 megawatts of power to Rhode Island via the Revolution Wind farm currently under construction off the coast of Block Island.
Ørsted did not immediately return requests for comment Friday.
Its proposal for the 1,200-megawatt Starboard Wind farm could still be chosen in Connecticut, where bids remain under review. The Connecticut Department of Energy and Environmental Protection expects to announce an award at an unspecified future date, Will Healey, an agency spokesperson, said in an email on Friday.
Barker, with Green Energy Consumers Alliance, said she was surprised Ørsted was not awarded a bid in Rhode Island, given its existing agreements to sell power to Rhode Island from the Revolution and Block Island wind projects, along with significant company investments in local port infrastructure and workforce training.
Ørsted also promised a $4 million investment to state environmental justice organizations, to be administered via the Rhode Island Foundation, if Starboard Wind was selected.
Kearns said the state will seek more offshore wind power through future solicitations.
“This is not the end of our offshore procurement efforts,’ he said. “This is just the best opportunity for us right now.”
Barker also stressed the need for Rhode Island to boost its offshore wind supply to meet quickly approaching decarbonization deadlines, including a 2030 benchmark to reduce emissions 45% below 1990 levels, and to drive down purchase prices.
“The more that we deploy offshore wind, and the more the local industry and supply chain grows, the better we are going to be at developing it, and the lower the prices will be,” she said.
Rhode Island Energy will now negotiate a contract with Ocean Winds, presenting a finalized agreement to state utility regulators in December. Ocean Winds expects to begin construction on its project in late 2025, pending federal, state and local permits, with a 2030 completion date.
Under the long-term contract, Rhode Island Energy will pay the project developer a set price per megawatt-hour of energy produced over the life of the project. The utility company in turn will benefit by selling renewable energy credits by supplying the wind power to the regional power grid.
The specific purchase price and revenue Rhode Island Energy expects to generate from SouthCoast Wind has not been shared. The Revolution Wind farm, approved by state regulators in 2019, sold power at a rate of 9.84 cents per kilowatt-hour, with the utility company projecting a $4.6 million profit over the 20-year contract. However purchase prices have jumped significantly in the last five years due to inflationary pressure.
“Today marks a pivotal moment for New England’s energy future, one where offshore wind will help meet Massachusetts’ and Rhode Island’s ambitious climate goals and the increasing demand for electricity,” Craig Windram, CEO for Ocean Winds, said in a statement.
The SouthCoast Wind project includes a commitment of $93 million to local workforce development, fisheries and marine science research, environmental justice and ratepayer support, according to Ocean Winds. New Bedford, Massachusetts, will serve as the central port for turbine assembly, operations and maintenance. The company also plans to open a hub for administrative needs and crew transfer vessels out of Rhode Island.
Rhode Island Energy, Rhode Island Commerce and the Rhode Island Office of Energy Resources will work with the developer to cement and track the state-specific economic development commitments included in the project proposal.
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