APPA News

by Peter Maloney
APPA News
Posted June 7, 2019

Recent actions in New England further point to the region’s growing position as a national center for offshore wind power.

Connecticut’s Senate on Tuesday unanimously approved a bill (HB 7156) significantly expanding the state’s mandate to purchase power from offshore wind farms. Democratic Gov. Ned Lamont is expected to sign the bill into law.

Fourteen days after the bill is finalized, the state would issue a solicitation for up to 2,000 MW of energy by 2030 from wind turbines in federal waters 40 to 60 miles from the Connecticut coast. The bill does not require the state to buy all 2,000 MW of wind power, giving state regulators the option to reject contracts it deems too expensive.

Passage of the bill “is really historic,” Samantha Dynowski with the Connecticut chapter of the Sierra Club, said. “Offshore wind is reliable, and it is the direction states in the region want to go.”

In December 2018, the state’s Public Utilities Regulatory Authority approved a 200-MW, 20-year power purchase agreement between United Illuminating and a joint venture of the U.S. affiliate of Danish wind power company Ørsted and New England utility Eversource.

The energy will come from the joint venture’s Revolution Wind project sited in federal waters roughly halfway between Montauk, N.Y., and Martha’s Vineyard, Mass.

Construction on the wind project is expected to begin in 2022 with the project online in 2023.

Connecticut’s moves follow regulatory action in neighboring Rhode Island. At the end of May, Rhode Island regulators approved a 20-year power-purchase agreement between National Grid and the Ørsted-Eversource joint venture.

The contract calls for National Grid to purchase 400 MW from the Revolution Wind project.

Revolution Wind is Rhode Island’s second offshore wind farm. The first, which was also the first in the nation, is the 30-MW Block Island wind farm that entered service late in 2016. The Block Island project was developed by Deepwater Wind. Ørsted bought Deepwater Wind in the fall of 2018.

Massachusetts, however, took the lead with offshore wind energy in August 2016 when Republican Gov. Charlie Baker signed the Act to Promote Energy Diversity, which allows for the procurement of up to 1,600 MW of offshore wind by 2027.

In June 2017, Massachusetts investor-owned utilities -- Fitchburg Gas & Electric Light Company, Massachusetts Electric Company, Nantucket Electric Company, NSTAR Electric Company and Western Massachusetts Electric Company -- in coordination with the Massachusetts Department of Energy Resources -- issued a request for proposals for offshore wind energy projects. In May 2018, the state announced that Vineyard Wind won the bidding with an 800-MW wind project 15 miles off the coast of Martha’s Vineyard. Pricing of the contract calls for the delivery of power at $65 per MWh. Vineyard Wind is a joint venture of Copenhagen Infrastructure Partners and Avangrid Renewables.

In 2018, Massachusetts passed An Act to Advance Clean Energy, which directed the state’s Department of Energy Resources to study costs and benefits of adding another 1,600 MW to the state’s offshore wind target.

That study, released on May 31, found that electric distribution companies in the state should proceed with additional wind solicitations for up to 1,600 MW of offshore wind energy and enter into contracts, if they are found to be cost effective.

The study recommends procurements to be conducted for 800 MW in 2022 and 2024 and, if necessary to meet the procurement target, in 2026.

The study says the additional procurement of 1,600 MW could save ratepayers $670 million to $1.27 billion over the 20-year life of the contract versus purchasing the same amount of clean energy in the markets.

The study recommends, however, that for expected benefits to materialize the levelized cost of the wind project would need to be less than about $71-75/MWh.

The study also noted that the cost effectiveness of the wind power contracts will depend on future prices in the regional renewable energy certificate (REC) market, which can be uncertain because REC values vary based on market supply and demand principles.