Commonwealth Wind’s offshore energy project will stay the course

Inspired by the steady winds that blow off the coast of Massachusetts, Avangrid Renewables is steadying its course on its Commonwealth Wind project despite the financial turmoil caused by the current domestic and global economic climate.

At the end of last month, the company, which is also a partner of the Vineyard Wind projectasked the state’s Department of Utilities to delay action by one month on its power purchase agreements negotiated earlier this year with the state’s utility companies – Eversource, National Grid and Unitil – so that it can pursue price renegotiations.

In a Decision of November 4the agency denied that request and gave Avangrid until Monday to decide whether to pursue or withdraw, try to renegotiate with utilities, and then possibly return at a later date with a new deal.

The company registered its decision to move forward on Monday.

“Avangrid believes there is a way forward for this project,” said Sy Oytan, the company’s senior vice president for offshore projects, in an email announcing that Avangrid had filed an official filing with the Department of Public Services on Monday “so that we can continue to engage in ongoing discussion.”

Avangrid proposes to generate 1,232 megawatts of electricity with its Commonwealth Wind project, making it the state’s largest offshore wind project proposed in waters about 22 miles south of Martha’s Vineyard. Barnstable’s Dowses Beach is believed to be the landing site for the project’s three power cablesa plan that has raised concerns among residents who believe the location is too fragile to carry out such a massive undertaking.

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The company recently filed an environmental notification form for the project with the state, the first step in a review and approval process that is expected to take about three years, according to Avangrid director Ken Kimmell. Vice President of Development for Offshore Wind.

Faced with funding difficulties due to the war in Ukraine, inflation, supply chain difficulties and rising interest rates, Avangrid had requested a one-month reprieve from Department of utilities tied to its power purchase agreements due to concerns about the viability of the project. The company suggested it would need “modest price increases” to keep Commonwealth Wind feasible.

But the state’s utility board, in its ruling, said ‘significant changes’ to the power purchase agreements, such as price, would require each of the utility companies to submit new filings for review. , including testimonials, analysis and supporting documentation demonstrating that the amended agreements comply with the filing and public comment policies.

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A renegotiation of the material terms of the power purchase agreements, such as price, “would delay the department’s decision by months, not weeks,” the decision said.

“In effect, the parties to the (power purchase agreements) would start over, and as such there is no delay avoided or efficiencies gained by granting a reprieve, unlike companies withdrawing their petitions and submit renegotiated (contracts), if any, at a future date.”

While Avangrid said in its Monday filing that the state’s Utilities Board should not dismiss PPA proceedings, company executives remain committed to “continuing discussions to use all opportunities, including contract improvements, to achieve a bankable and economically viable project”. “

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State and federal lawmakers are working to overcome economic hurdles that offshore wind energy developers currently face, such as increased tax credits for their projects under the federal reduction in inflation, according to Secretary of State for Energy and Environmental Affairs Beth Card.

In a letter to Avangrid, she wrote, “we are committed to working with you and other offshore wind developers to take advantage of all available federal incentives to facilitate the growth of offshore wind.”

Despite the challenges, Avangrid stressed the importance of maintaining its Commonwealth Wind project rather than exiting litigation with the Department of Public Utilities. As the most important piece of the state’s offshore wind plan, removing it would likely mean missing the state’s goals for reducing greenhouse gas emissions.

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under the aegis of the state 2050 Decarbonization Roadmap Zero Emissions PlanMassachusetts must reduce greenhouse gas levels by 59 percent from 1990 levels over the next eight years and achieve net zero emissions by 2050. To achieve these goals, the state must develop 15 to 25 gigawatts of clean energy from offshore wind power.

Commonwealth Wind, Oytan said, “provides the region’s most significant clean energy opportunity to address climate change, create thousands of jobs and help New England meet its significant reliability challenges.”

“Just as we did with our joint venture, the Vineyard Wind 1 project, the first in the nation, Avangrid is focused on changing the game and delivering a clean energy future to Massachusetts,” he said. . “We have been transparent and determined, at all times, to do everything we can to move the project forward, including talking to all parties to find a solution to the unprecedented economic challenges facing this major project. infrastructure.

In addition to its Commonwealth Wind project, Avangrid is a 50-50 partner with Copenhagen Infrstructure Partners in the 800 megawatt Vineyard Wind project which is already underway south of Martha’s Vineyard and Barnstable, where it has two cables landing at Covell Beach.

The company is also working on its own project, Park City Wind, with two 400 megawatt cables slated to land at Craigville Beach in Barnstable. This project, which will ultimately provide electricity to Connecticut, is still in the permitting process and has a host community agreement in place with the city.

Avangrid’s Kimmell said if permission is granted to Commonwealth Wind and the project remains on track, onshore construction could begin by the end of 2025, followed by offshore construction at the end of 2026 or early 2027.

Contact Heather McCarron at [email protected]

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