Massachusetts Awards Two More Contracts for Offshore Wind
The amount of offshore wind power in the Massachusetts pipeline is poised to roughly double with the selection Friday of projects from both Vineyard Wind and Mayflower Wind to cumulatively generate 1,600 megawatts of cleaner power for the Bay State by the end of this decade.
A group of utility executives working with assistance from the Baker administration was seeking 1,600 MW more of offshore wind power but got just two bids that each maxed out at 1,200 MW and came only from the two developers already under contract to deliver offshore wind power to Massachusetts. So instead of picking just one 1,200 MW project, the group selected Vineyard Wind's roughly 1,200 MW Commonwealth Wind proposal and supplemented it with a 400 MW project offered by Mayflower Wind.
Both developers are already working on roughly 800 MW projects for Massachusetts. Vineyard Wind I, the first utility-scale offshore wind farm in the nation, is in the very early stages of construction and is due to come online by the end of 2023. Mayflower Wind's initial 804 MW project just began its federal review process and is expected to be up and running in 2025.
"These projects will double the size of our current offshore wind procurements, they will deliver significant economic benefits to a number of coastal communities across the commonwealth, they include important provisions for diversity, equity and inclusion as well as benefits to environmental justice communities, and they invest significantly in the state while balancing protections with environmental resources including fisheries," Energy and Environmental Affairs Secretary Kathleen Theoharides told the News Service on Friday.
Once the two projects already under development and the two selected Friday are operational, offshore wind will generate roughly 25 percent of Massachusetts' annual electricity demand, enough to power about 1.6 million homes, the administration said.
Contracts with Vineyard Wind and Mayflower Wind are expected to be negotiated by March 28, 2022, and final contracts are supposed to be submitted for Department of Public Utilities approval by April 27, 2022. Theoharides said she was not at liberty to disclose pricing information while the contracts are under negotiation but said both projects came in cheaper than the last Mayflower Wind project did, in accordance with the state's offshore wind price cap.
The contracting process might be "a bit more complicated than in the past" because projects from two developers were chosen to go into negotiations at the same time, but otherwise the selection of two projects does not create any significant differences from previous procurements, the secretary said.
To meet its midcentury climate goals, Massachusetts will have to get on pace of bringing about 1 gigawatt (or 1,000 MW) of offshore wind power online each year in the 2030s, the Baker administration has said. The four projects either selected or under contract total about 3,200 MW and the state can procure another 2,400 MW before the Legislature must authorize more.
Mayflower Wind said its 400 MW proposal is accompanied by an economic development package that includes "commitments to spend up to $42.3 million, including $27 million over 10 years to the SouthCoast Community Foundation."
"Mayflower Wind is looking forward to delivering low-cost renewable energy to residents and businesses throughout Massachusetts," CEO Michael Brown said. "And we are committed to investing in our local communities and being an engine for economic and workforce development."
Vineyard Wind's 1,200 MW Commonwealth Wind project "will create 11,000 full time equivalent jobs over the project's lifetime and generate enough energy to power 750,000 homes annually," officials with parent company Avangrid said. The Commonwealth Wind bid also includes an initiative to launch the state's first offshore wind manufacturing facility for subsea transmission cables at Brayton Point in Somerset.
"This is more than just one project, it is part of an effort to build a clean energy infrastructure including the transformation of ports around our state as well as jobs and training that will support this clean energy industry for decades to come," President and CEO of Avangrid Renewables Offshore Bill White said. "We are proud that Commonwealth Wind will help realize the vision of Governor Baker and the leaders of the Massachusetts Legislature in pioneering this new American industry."
A slew of lawmakers were quoted in a Friday press release from Mayflower Wind, including Senate Ways and Means Chairman Michael Rodrigues of Westport, Rep. Patricia Haddad of Somerset, Rep. Antonio Cabral of New Bedford and Rep. Carole Fiola of Fall River. Since including the first procurement as part of a 2016 clean energy law, the Legislature has increased the amount of offshore wind power the state is authorized to seek and more recently has turned its attention to proposed reforms to the procurement process.
Among those proposed reforms is the idea of scrapping the state's offshore wind price cap, which requires the power from each new project to be cheaper than the project before it. Gov. Charlie Baker and House Speaker Ron Mariano have both supported the idea but Sen. Michael Barrett worried that eliminating the cap would mean even higher electricity prices for Massachusetts ratepayers in exchange for economic development projects.
In a press release from the administration, Barrett said Friday's announcement shows that economic development and affordability are not mutually exclusive.
"This round sees a wise balance struck between economic development, on the one hand, and protection against excessively high monthly electric bills for families, on the other," the Senate chairman of the Committee on Telecommunications, Utilities and Energy said. "Going forward, this can serve as a model for us."
Supporters of scrapping the price cap say it could encourage more competition for contracts and also enable bidders to weave other innovative and valuable proposals into their wind energy procurements.
The selection of Vineyard Wind's 1,200 MW proposal positions Salem to become a significant port in the offshore wind industry. Vineyard Wind announced in September that it had entered into an agreement with the city of Salem and Crowley Maritime Corporation to create a public-private partnership "aimed at establishing Salem Harbor as the state's second major offshore wind port" and creating hundreds of jobs if its Commonwealth Wind proposal was selected by Massachusetts utilities.
Under the agreement, Crowley Maritime will buy land surrounding Salem Harbor Station and then serve as the long-term offshore wind port operator for the site. Avangrid Renewables and Copenhagen Infrastructure Partners, the groups behind the Vineyard Wind I joint venture, will serve as the port's anchor tenants and will use "the property for the Commonwealth Wind project as well as other projects in the company's portfolio."
Salem Mayor Kim Driscoll said Friday that the selection of the Commonwealth Wind proposal "marks a transformative moment for Salem, our Commonwealth, and our planet."
"As the planned marshalling and construction staging site for this next generation of major offshore wind power, Salem now has a brighter future," she said. "It's a future with hundreds of green jobs, a substantial expansion of our tax base, major private investments in improving our historic port, unique opportunities for new science, education, and workforce development initiatives, and, most importantly, the ability to take a significant, positive step forward in fighting the climate crisis."
A port that can accommodate wind development needs in Salem could be key to eventual offshore wind projects in the Gulf of Maine, an area that many advocates think could be primed to host some of the dozens of wind farms that will be needed to meet various state and federal procurement goals.
The federal Bureau of Ocean Energy Management in late 2019 formed the Gulf of Maine Intergovernmental Renewable Energy Task Force, a group that brings together energy and environmental officials from Maine, New Hampshire and Massachusetts to start thinking about how, where and whether the federal government should open up parts of the Gulf of Maine to offshore wind development.
Information from State House News Service