Bids Promise Bright Future for Offshore Wind in Massachusetts

By: Tim Cronin

State regulators, utilities, and independent overseers are examining three proposals to develop 400MW of wind energy in federal waters off the coast of Martha’s Vineyard and New Bedford.

December 20th was the deadline for bid submissions made after the June RFP made collaboratively by state and utility stakeholders. The goal of the procurement is to boost the percentage of clean energy used in Massachusetts. When completed, the procurements are also expected to lower long-term energy costs for state ratepayers.

The winner of this first-round of procurement bids is expected to be chosen by March 2018, with construction beginning as early as 2019, and operation as soon as 2021.

 

Massachusetts Clean Energy Law

The solicitation is the result of the state’s 2016 energy diversity bill, which directed Massachusetts IOUs to enter into 20-year contracts to purchase a total of 2,800 MW of renewable energy. The law calls for 1,600 MW of this energy to come from offshore wind, while the remaining 1,200 MW is to come from a mixture of hydro, solar, and other Class I renewables. This is enough energy to power about a million homes, or about twice the electricity produced by the Pilgrim nuclear power plant, which is set to shut down in two years.

The state procurement plan for offshore wind is spread over many years, with this current round seeking to develop projects producing between 400 and 800 MW of energy. Current projects are encouraged to be scalable, with transmission line proposals required to accommodate the full 1,600 MW expected in offshore wind.

For more information on bids submitted to supply the remaining 1,200 MW of energy from Class I renewables, check out my blog on proposed energy generator and transmission line packages.

 

Project Highlights

The pricing for each of the projects is not currently public, but the bids display differences in size, transmission lines, timelines, storage, and project partners. All three proposals have pledged to use the Marine Commerce Terminal in New Bedford as an onshore staging area for turbine construction.

Vineyard Wind

• In January 2015, Vineyard Wind and Vineyard Power (a CABA member business) signed the nation’s first, federally recognized, offshore wind Community Benefit Agreement in the US.
• Iberdrola has experience developing wind projects in European markets, while CIP has invested in multiple European projects.

Deepwater Wind (Revolution Wind)

• Offered a diversity of capacity options in order to accommodate regulator/utility needs.
• National Grid is among this project’s partners, but is also among those choosing the final project. Independent regulators are tasked with ensuring no illegal conflict exists.
• This bidder has previous experience developing the Block Island wind farm and Block Island cable in Rhode Island.

Bay State Wind

• This project has not released a timeline for construction, but expects it to take several years to acquire permits and only two to construct.
• The danish wind energy giant DONG has previous experience in the European wind energy market.
• National Grid is among this project’s partners, but is also among those choosing the final project. Independent regulators are tasked with ensuring no illegal conflict exists.

 

Analysis

From a small business perspective offshore wind procurement has some important upsides. It is important to invest in large scale renewable energy projects, as this RFP does. Such projects help to reduce long-term energy costs for ratepayers, including local small businesses. Plus it helps reduce our energy grid dependence on fossil fuels, which is good for the climate and local grid resiliency.  

Additionally, no matter the project selected, the supply chain for the entire 1,600 MW procurement is expected to be a multi-billion dollar industry in the state. Massachusetts is poised to be the among the first hubs for offshore wind, with companies gaining expertise as a result of the procurement

There exist concerns that the wind energy produced could cause Massachusetts utilities to pre-maturely achieve their Renewable Portfolio Standard (RPS), which is intended to incentivize small and medium scale solar.  

 

Next Steps

Winning bids are slated to be chosen by late April 2018, with contracts expected to be negotiated by the end of July. Construction could begin as early as 2019, with the selected project operational as early as 2021.

 

About the author: Tim assists in coordinating CABA’s Policy Program, and is a young professional with experience in community organizing and state politics. He is currently pursuing a B.A. in Economics at Stonehill College. Tim has previously studied Politics, Philosophy, and Economics (PPE) at Oxford University, and has interned at the State House and in local government. He currently serves as student-body president at Stonehill College where he has continued to fight for sustainable initiatives such as fossil fuel divestment, expanding the college’s solar farm, and reducing food waste. Tim is on the board of a local civic association in his hometown of Weymouth, and is the founder of the community nonprofit Green Weymouth. Tim enjoys reading The Economist, listening to podcasts, and exploring state parks in his free time.