BOSTON – State public utility regulators have approved long-term offshore wind contracts between Vineyard Wind and electric distribution companies in Massachusetts, giving the offshore wind farm developer a crucial approval needed to start construction by the end of the year.
“The approval of these contracts is an important step toward the completion of the largest offshore wind project in the country,” Gov. Charlie Baker said in a statement issued by the state Department of Public Utilities.
The project will “significantly reduce greenhouse gas emissions, provide Massachusetts residents and businesses with cost-effective clean energy and promote economic development,” Baker said.
In mid-July, Eversource, National Grid and Unitil each filed a petition with the department for approval of long-term contracts to purchase offshore wind energy and associated renewable energy certificates. Two months earlier, Vineyard Wind’s bid on the long-term power contracts for 800 megawatts a year was selected for contract negotiation by the three electricity distribution companies.
“This approval ensures that this project offering competitively priced and locally produced offshore wind energy to the Commonwealth can move forward,” state Energy and Environmental Affairs Secretary Matthew Beaton said in the statement.
A spokesman for Vineyard Wind declined comment Tuesday, citing previously agreed-upon legal constraints.
The company intends to start construction of the $2 billion wind farm later this year to take advantage of a one-time federal investment tax credit program. Use of the tax credit within a long-term power purchase agreement was a key factor in the company’s ability to make a competitive offer for the contracts, the company’s CEO, Lars Pedersen, said previously.
An approval of Vineyard Wind’s plan to land its high-voltage cable on the southern coast of Barnstable still needs to be approved by the state’s Energy Facilities Siting Board, which had been delayed after initial estimates pegged that decision for March 1. The board is expected to meet May 9 in Boston. Likewise, the Cape Cod Commission has continued to May 2 its public hearing on its review of the cable-laying as a development of regional impact.
In the contracts, Vineyard Wind has committed to contributing $15 million to a fund that will invest in projects designed to promote the use of battery storage in low-income communities and support the state’s goal to further the development of energy storage systems across the state, according to the statement.
Criteria used in the evaluation of the bids – where Vineyard Wind emerged the winner, in May – included an economic evaluation of the benefits for ratepayers, the project’s ability to foster employment and economic development in Massachusetts, and the project’s environmental impacts and the extent to which a project demonstrates that it avoids or mitigates impacts to natural resources and tourism, according to the statement.
The department’s order on Tuesday approved the selection of Vineyard Wind – which plans to build 84 turbines south of Martha’s Vineyard – and found that the contracts are cost-effective as well as in the public interest, according to the statement.
In August 2016, Governor Baker signed into law an energy diversification measure requiring utilities to competitively solicit and contract for approximately 1,600 megawatts of offshore wind and approximately 1,200 megawatts of clean energy.
The solicitation of the second 800 megawatts of offshore wind energy is expected later this year, with a proposed deadline for submission of confidential proposals set for Aug. 9. However, the request for proposals has not yet been approved by the Department of Public Utilities, a department spokeswoman said.
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