Final approval for the Vineyard Wind Project will likely not happen for at least another 18 months, according to information received from multiple sources by The Public’s Radio. This means the country’s first large scale offshore wind farm won’t begin construction in time to take advantage of a lucrative federal tax credit that expires at the end of the year.
The Department of the Interior will decide on whether to approve construction of the Vineyard Wind project in December 2020, according to sources.
The project was set to begin construction by the end of this year but encountered a major delay after Interior Secretary David Bernhardt announced a hold on offshore wind projects until a “cumulative analysis” is conducted.
It leaves the immediate future of the Vineyard Wind project in doubt.
The developer won a contract with three Massachusetts utilities to sell power at 8.9 cents per kilowatt-hour compared to the over 16 cents Massachusetts homeowners are already paying for electricity. But the developer was able to deliver on that price because of a tax incentive credit that’s estimated to account for over 15-percent of Vineyard Wind’s expected revenues.
U.S. Rep William “Bill” Keating (D-Mass) says the move to delay the Vineyard Wind project is an attempt by the Trump administration to squander the future of the offshore wind industry.
“They’re throwing a stop flag up on this project that was moving along consistently,” Keating says. “It could cause serious problems in terms of financing capitalization.”
The developer could end up overcoming this roadblock if the federal tax credit gets extended. Congressman Jim Langevin (D-RI) introduced federal legislation in June that would extend the investment tax credit for offshore wind development to 2026.
“If my legislation doesn’t get passed it could be a signal that establishing offshore wind is going to be more challenging,” Langevin says, noting he doesn’t know if the bill could pass by year end. “We’re going to do everything we can to see if the bill gets passed on its own or a broader package.”
In a statement last week, Vineyard Wind said the delay was a “surprise” and “disappointment” and has vowed to continue with the $2.8 billion project under a revised schedule.