Northeast Sets Course for Abundant, Affordable Offshore Wind
On Wednesday, August 1st, three Massachusetts electric utilities filed long-term contracts with the Department of Public Utilities for the largest procurement of offshore wind in U.S. history. Vineyard Wind will deliver 800 MW of offshore wind capacity in two tranches of 400 MW with target completion dates of mid-January 2022 and 2023. Over the twenty-year contract, the project will deliver electricity at a levelized price of $65/MWh.¹ This pricing falls well below predictions that ranged from $160/MWh to $90/MWh.² The legislation authorizing the procurement of offshore wind capacity specifies that prices must fall with each successive solicitation.
These record low prices are nearly half the price of the most recent Maryland contracts, which came in at $132/MWh. The 30 MW Block Island project in Rhode Island signed a PPA with a price of $244/MWh.
Two other offshore wind contracts are expected to be filed this fall—Rhode Island and Connecticut both have procured offshore wind capacity from Deepwater Wind’s Revolution Wind project at 400 MW and 200 MW, respectively. The price details have not yet been released. Both Rhode Island and Connecticut coordinated their solicitations to seize the cost reduction opportunity of buying in bulk with other states.
New York is swiftly moving ahead to procure at least 800 MW of offshore wind capacity by the end of 2019. NYSERDA has released a Request for Information seeking feedback on the development of the Request for Proposals.
Hot on New York’s heels, New Jersey is moving quickly to procure the first 1,100 MW of its 3,500 offshore wind goal. Late last month, the New Jersey Board of Public Utilities proposed a rule for its OREC funding mechanism. Once the rule is made public, there will be a 60-day comment period.
And a few days ago, the Massachusetts Legislature passed An Act to Advance Clean Energy, which, among other things, establishes a path forward for soliciting an additional 1,600 MW of offshore wind by 2035.
¹ Pricing includes energy and environmental attributes. There is an annual, 2.5% escalator over the life of the contract.
² The University of Delaware and the Brattle Group each estimated that the price of electricity from Massachusetts’ projects would range between $162-$100/MWh (U.Del) and $110-$90/MWh (Brattle) between 2020 and 2030.
This blog post was also published in Renewable Energy World.
April 6, 2018