Governor Charlie Baker’s administration has kicked off the state’s third round of bidding for offshore wind energy contracts, and this one has the potential to be the biggest yet.
State officials are soliciting bids for up to 1,600 megawatts of offshore wind electricity this time around.
To put that in perspective, the Vineyard Wind development team won the state’s first round of offshore wind energy bids in 2018, to deliver 800 megawatts to Massachusetts electricity customers. That was enough power for more than 400,000 homes. The Mayflower Wind team won the second round in 2019, with a similarly sized proposal.
State officials hope that by offering the opportunity to go bigger, economies of scale can help control costs and logistics for the industry, particularly with regard to power lines to bring that electricity to the mainland. The rules for the new round of bidding were filed with the Department of Public Utilities on Wednesday.
Working with the state’s major electric utilities, the Baker administration also refashioned the bidding requirements to encourage more diversity among the people who work on the projects. A full 30 percent of the scoring will be based on several “qualitative factors,” including a project’s potential economic impact, as well as equity and inclusion. (In previous rounds, qualitative factors counted for 25 percent of the total score.)
But the focus remains squarely on achieving a low price. The remainder of the scoring, 70 percent, will essentially hinge on the prices that the bidders offer the state’s two main electric utilities, National Grid and Eversource. (Unitil is also involved but has only a small number of customers in the state.)
Bidders will also need to adhere to a provision in state law that says any subsequent bid must beat the price, as measured by dollars per megawatt hour, offered in the previous winning bid – the one offered by Mayflower Wind, in this case.
Bids for round three are due by September. The utilities, working with the Department of Energy Resources, will pick a winner by mid-December.
The Legislature set the stage for these bidding contests by passing a clean-energy law in 2016 that called for up to 1,600 megawatts of offshore wind capacity. Lawmakers doubled that amount in 2018. (A wide-ranging climate bill nearing completion on Beacon Hill would add another 2,400 megawatts.)
The goals: helping the state to achieve its ambitious greenhouse-gas reduction goals, while providing new sources of electricity as older power plants are mothballed. Many had hoped Massachusetts would get a first-mover advantage by launching the offshore wind industry. Several other Northeast states have since followed with their own offshore wind bidding contests.
Vineyard Wind, a joint venture of Avangrid and Copenhagen Infrastructure Partners, would build the first of these massive wind farms to go up in ocean waters in this country. But the federal permitting isn’t done yet, let alone financing and construction. (Two small offshore wind farms are complete, though, in Rhode Island and Virginia.) The Trump administration had held up permitting for Vineyard Wind amid protests from the commercial fishing sector about the turbines’ potential hazards. But the Biden administration has put Vineyard Wind on a fast track and announced a key federal permit decision earlier this week.
The developers say they hope to start construction on the 62-tower wind farm within a year and have it generating power by the end of 2023.
The field of potential bidders for the Massachusetts contracts is pretty much known already: Several development teams, all with ties to European companies, have secured lease rights to sections of the ocean controlled by the federal government south of Martha’s Vineyard and Nantucket. They include Bay State Wind (run by Ørsted and Eversource), Vineyard Wind, Equinor (formerly Statoil), and Mayflower Wind (Shell, EDP Renewables, and Engie).
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