Mayflower Wind still doesn’t have a final contract for its offshore wind farm off the coast of Nantucket, but it appears to be moving ahead with the project anyway in a bid to tap federal investment tax credits.
A press release issued by a joint venture of two Danish companies on Wednesday indicated Mayflower has hired them to build a 1,200 megawatt offshore substation. “The offshore substation project will be initiated in January 2020,” says the press release put out by Semco Maritime, an engineering and contracting company, and Bladt Industries, a steel construction firm.
Michael Brown, the chief financial officer of Mayflower, said in the press release that the contract with Semco and Bladt is part of an effort to obtain federal tax credits before they expire.
“Recent changes to US tax law now allow projects that meet qualification standards in 2020 to secure federal investment tax credits at the 18 percent level,”* Brown said. “This contract is a key step for us to meet those standards and secure tax credits that would ultimately result in a lower rate for electricity customers in Massachusetts.”
In its bid for the wind farm contract, Mayflower offered three major options – a lowest-price option, an option with a slightly higher price but with more onshore investment, and an option with a still higher price along with far more onshore investment. The company said the price in all three bids would be less than what Vineyard Wind promised in its head-turning winning bid for the state’s first offshore wind farm.
The state’s three utilities, with no apparent pushback from the Baker administration, selected Mayflower’s lowest-price option, which disappointed officials on the South Coast who are looking to offshore wind as a way to generate more economic activity and jobs in the region.
Mayflower, a joint venture of Shell New Energies and EDPR Offshore North America, is hoping to have its 804-megawatt wind farm up and running in 2025.
Mayflower Wind won the state’s second offshore wind contract at the end of October, but the terms of the deal spelling out the price and other obligations remain under wraps. The original goal was to finish the contract on December 13, but that deadline passed with no action. On Tuesday, the state’s three utilities, who are handling the negotiations with Mayflower, said they struck a final deal Friday evening. But, again, they said the terms of the deal would not be released until the document is sent to the Department of Public Utilities for approval, which is expected to occur no later than February 10.
John Hartnett, Mayflower’s president, said in a telephone interview that the company is taking some risk in moving forward with construction before the final contract is in place. A federal environmental review that has delayed construction of Vineyard Wind is also dragging on.
But Hartnett said he is confident the Mayflower Wind’s contract will get done and the wind farm will go up. He’s so confident that the company is building a 1,200 megawatt substation to accommodate the firm’s future growth in its lease area off the coast of Nantucket.
“Climate change is real and we really need to get moving,” Hartnett said. “That’s why I’m confident we’ll move forward with this project.”
*NWW note: Both the production tax credit and the up-front investment tax credit were extended for 1 year at the 2018 rate. https://www.irs.gov/instructions/i8835
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