The state’s largest utility company has decided not to move forward with a massive offshore wind project in Rhode Island, arguing that rising costs have made the deal too expensive for ratepayers and out of line with state law.
Rhode Island Energy, formerly known as National Grid Rhode Island, announced Tuesday it’s ending a long-term power purchase agreement proposal with offshore wind companies Orsted and Eversource. The plan would have allowed the energy group to move forward with a plan to create 600 to 1,000 megawatts of offshore wind generation as part of a project dubbed Revolution Wind 2.
“The economic development benefits included in the proposal were weighted and valued appropriately by our evaluation team, but ultimately it was determined those features did not outweigh the affordability concerns and other [state law] standards,” Rhode Island Energy president Dave Bonenberger said in a statement.
Orsted spokesperson Meaghan Wims said the offshore wind company is disappointed with the decision and would continue to assess its options for the project moving forward.
“This project would put Rhode Island’s 100-percent clean energy future in reach, delivering renewable energy to hundreds of thousands of homes and creating more than $2 billion in direct economic benefits to the state, with historic investments in local union jobs, workforce training, ports and the supply chain,” Wims said in a statement.
Rhode Island Energy officials argued the decision, which comes after consultation with the R.I. Office of Energy Resources and R.I. Division of Public Utilities and Carriers, stemmed from higher interests, increased costs of capital, supply chain expenses and uncertainty surrounding federal tax credits.
They argued those economic factors ultimately resulted in the proposal failing to meet standards established under the state’s Affordable Clean Energy Securities Act, which was created in 2014 to spur more investments in energy infrastructure.
Last October, the state issued a request for proposal to develop Revolution Wind 2, which came on the heels of an initial Revolution Wind project created in 2019. The 400-megawatt project is still moving forward with a goal of becoming operational in 2025.
Rhode Island Energy also has a longstanding agreement with the five-turbine Block Island Wind Farm, which became the first commercial offshore wind in the United States.
Orsted and Eversource was the only energy group to submit a proposal for Revolution Wind 2. The proposal has since been vetted and now ultimately rejected by Rhode Island Energy. A DPUC spokesperson said state regulators agreed with the utility company’s assessment of the deal, and both entities are expected to submit documentation backing up their decisions within 60 days.
Gov. Dan McKee spokesperson Olivia DaRocha said the administration remains committed to offshore wind and securing a third project.
“While this was not the outcome that we wanted from this RFP process, Rhode Island Energy thoroughly reviewed this project proposal and found that it did not meet the energy requirements of the ACES Act,” DaRocha said in a statement. “It is essential that any new Rhode Island offshore wind project that is selected for development presents the best outcome for our ratepayers and economy.”
The proposal ending will likely come as a blow to some clean-energy advocates who have pushed the state to move more rapidly away from fossil fuels and toward reducing greenhouse gas emissions. The state will likely have to go back to the drawing board and come up with a new plan for creating more offshore wind development.
Bonenberger insisted this decision is about protecting ratepayers and remaining compliant with state law rather than a signal the company is giving up on offshore wind in Rhode Island.
“In fact, we are already in discussions with state and regional leaders about new opportunities to bring more offshore wind to the state, which we hope to progress in the coming months,” he said.
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