PROVIDENCE – The state has selected Deepwater Wind, the Providence company that built the nation’s first offshore wind farm, to develop a 400-megawatt proposal in federal waters far off the coast that would be more than 10 times the size of the Block Island demonstration project.
Gov. Gina Raimondo announced the surprise decision Wednesday afternoon.
“Rhode Island made history when we built the first offshore wind farm in the United States,” she said in a statement. “Today, we are doing it again.”
The governor made the announcement at the same time that Massachusetts announced that it had selected Vineyard Wind, a rival offshore wind developer, to develop an 800-megawatt project in the same general area of federal waters that curves southeast in a wide swathe from a point between Block Island and Martha’s Vineyard.
The 1,200 megawatts of total offshore wind capacity represents a huge step forward for an industry that has so far developed only 30 megawatts in the United States.
While the Massachusetts selection was eagerly anticipated, Rhode Island’s decision wasn’t even expected.
Deepwater Wind CEO Jeffrey Grybowski said he first heard on Tuesday night that Rhode Island might select his company’s proposal.
“I only found out officially today,” he said in an interview. “I’m still taking it in.”
Both selections resulted from the same procurement process led by Massachusetts that was initiated in 2016 when Bay State Gov. Charlie Baker signed a new law requiring that state’s electric companies to purchase 1,600 megawatts of offshore wind power over a decade.
Massachusetts issued a request for proposals for the first 800 megawatts of that supply last year, and in December, Deepwater Wind, Vineyard Wind and a third company, Bay State Wind, responded with a variety of configurations of different sizes.
The Rhode Island Office of Energy Resources and the state Division of Public Utilities and Carriers worked with counterparts in Massachusetts to add Rhode Island-specific questions to the bidding requirements. They included queries related to economic and environmental impacts, as well as fuel security, in Rhode Island.
The two state agencies also hired Power Advisory Group, a consulting firm with offices in Concord, Massachusetts, to work as an independent evaluator of the proposals. National Grid was also involved in the process because it is Rhode Island’s electric distribution company and will be party to any long-term power purchase agreements that result from the process.
Carol Grant, commissioner of the Office of Energy Resources, said that the Deepwater proposal offers the most to Rhode Island.
“We were looking at the total package,” she said in an interview. “From our perspective, the Deepwater package was the most beneficial to Rhode Island that we had the opportunity to take.”
Although she said she could not at this time disclose the price of power quoted by Deepwater, she said that it is low.
“From our evaluation, they will actually save consumers in Rhode Island,” she said.
Grybowski, too, would not reveal the price, citing concerns over competition because an RFP in Connecticut that Deepwater responded to is still under consideration.
“I would like to share the price, but I can’t today,” he said. “I will disclose this price shortly. What I can tell you is that it’s dramatically lower than the Block Island price. I think that people will be shocked at the price level.”
The Block Island price, which started at 24.4 cents per kilowatt hour and is escalating at 3.5 percent a year, is significantly higher than the price National Grid pays for power from fossil fuel-burning generators and other conventional sources. It is, however, competitive with other renewable energy projects that have been developed in Rhode Island.
Grybowski said that beyond the low price, there are other benefits to the project, including job creation and economic development resulting from staging construction at Rhode Island ports.
“We will be making very significant investments in Rhode Island port infrastructure,” he said. “I think they will be historic-level investments that will help position Rhode Island in this growing industry. We will make Rhode Island a major center of construction and operations activity. There are many hundreds of jobs associated with this.”
Renewable energy advocates welcomed the news, saying it could spur the creation of a domestic offshore wind industry. Although more than 4,000 wind turbines have been installed in the ocean waters off Europe, the five put up off Block Island by Deepwater in the fall of 2016 are still the only ones in the United States.
“This move will firmly establish the region as the nation’s leader on offshore wind and attract thousands of clean energy jobs to the southern New England region, bringing significant economic benefit to customers and helping the region meet our strong environmental goals,” said Peter Rothstein, president of the Northeast Clean Energy Council.
Deepwater is calling its project Revolution Wind. It would be built with up to 50 wind turbines that could range in size from 8 megawatts each to 12 megawatts. The wind farm will be located in a 256-square-mile area of waters that the company is leasing from the federal government.
It would constitute the second phase of development in Deepwater’s federal lease, following construction of the 90-megawatt South Fork Wind Farm, which would supply electricity to the Long Island Power Authority. The South Fork proposal is expected to go on line in 2022. Revolution Wind would come afterward, in 2023.
The selection of the offshore wind proposal comes in addition to a 400-megawatt RFP for renewable energy that Rhode Island is preparing to release in August. Combined with Wednesday’s announcement, it would put the state well on the way to meeting Governor Raimondo’s goal of securing 1,000 megawatts of renewable energy by 2020.
The next step in the process for Revolution Wind is negotiating a power contract with National Grid. That agreement will then be submitted to the Rhode Island Public Utilities Commission for approval. Deepwater will also have to apply for permits from the U.S. Bureau of Ocean Energy Management, along with the state Department of Environmental Management, the Coastal Resources Management Council and other agencies.
“This is the first important step, but there will be much public review,” Grant said.
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