Offshore wind advances in wake of Cape Wind’s death

Source: Benjamin Storrow, E&E News reporter • Posted: Friday, December 22, 2017

In Massachusetts, the failure of a controversial offshore wind project is being supplanted by plans for even bigger turbines in the water.

Earlier this month, the developer of Cape Wind, a controversial wind project off the coast of Martha’s Vineyard, announced it was pulling the plug on a proposal that had generated more than a decade of squabbling among state lawmakers, utilities and landowners.

Then yesterday, Massachusetts regulators announced they had received bids from three developers for projects that would dwarf Cape Wind. Only this time, the proposals were met with cheers.

The episode highlights the maturation of the industry. Two of the proposals call for pairing wind turbines with energy storage on the mainland. Cape Wind would have generated enough electricity for 200,000 homes. Two of the proposals would be roughly double that.

A Massachusetts law requiring utilities to purchase offshore wind and a ruling from the state’s high court obligating the commonwealth to reduce carbon emissions account for much of the change. Cutting carbon in Massachusetts is not just an aspirational goal, but a legal one.

But the new projects are beneficiaries of Cape Wind’s experience. No leasing process existed for installing turbines in the ocean when Cape Wind was proposed 16 years ago. The result: The 130-turbine project would have been visible on Martha’s Vineyard, much to the consternation of the island’s fishermen, Native Americans and well-heeled residents.

This time, the closest project to shore is Vineyard Wind LLC’s 800-megawatt development, some 15 miles south of the island. Like its competitors, Vineyard Wind has already gone through a lengthy siting process and acquired a lease for the project. It has backers with deep pockets and a track record of installing turbines in the ocean. Vineyard Wind is a partnership of Avangrid Inc. and Copenhagen Infrastructure Partners.

It has competition from Bay State Wind LLC, which is backed by Eversource Energy, New England’s largest power supplier, and Ørsted A/S, the Danish wind developer formerly known as Dong Energy. Bay State has proposed an 800-MW project, enough to supply 500,000 homes. Its bid calls for building a 55-MW battery on the mainland, the largest to ever be paired with a wind farm in the United States. Bay State estimates the project could save ratepayers $300 million annually in lower wintertime power costs.

“The partnership between Ørsted and Eversource brings together local experience, international expertise and unbeatable financial strength,” said Ørsted President of North America Thomas Brostrøm. “This project is poised to be the most technologically advanced offshore wind farm providing energy at the lowest cost to consumers, all while bringing significant environmental and community benefits.”

The third proposal is from Deepwater Wind, a Rhode Island-based firm that installed the first offshore wind farm in the United States near Block Island. Deepwater Wind’s bid calls for a 144-MW development that can be scaled up to 400 MW. The company’s turbines would be paired with the largest pump storage facility in New England.

“Our offshore wind solution can replace power plants of prior generations that are now retiring. Offshore wind produces a massive amount of clean energy, and we can now deliver that power even when the wind is not blowing,” said Deepwater CEO Jeff Grybowski.

Questions still remain, of which the biggest is cost. The bids submitted to Massachusetts regulators this week were closed. Wind developers have pledged they can offer prices at competitive rates. The turbines employed today are much larger than those envisioned by Cape Wind, and costs have fallen as a result.

But their bids are still likely to come in on the high end, said Paul Hibbard, a consultant who tracks the power industry at the Analysis Group.

“But there is a zone of reasonableness when you consider the very real policy expectations of the commonwealth of Massachusetts,” he said, referring to the state’s carbon goals.

There are also concerns about how the proposal could impact New England’s wholesale electricity market, of which Massachusetts is a member. The Bay State’s wind mandate coincides with a separate requirement that utilities acquire more low-emitting electricity, the most likely source of which is hydropower.

Those requirements will effectively ensure long-term contracts for project developers, said Dan Dolan, who leads the New England Power Generators Association, a trade group.

“At the same time, other resources have to fight in the market every day and are still needed for reliability,” he said.

Ultimately, it will be up to power suppliers and state regulators to decide if the projects should proceed. The bids will be reviewed by Massachusetts power suppliers and the state Department of Energy Resources to determine if any of the proposals are cost-effective. If a developer can reach an agreement with a power supplier, the contract will be reviewed by the state Department of Public Utilities. Even if all goes well, turbines are not expected to be spinning until the next decade.

But that’s just fine by Massachusetts’ wind developers. After a decade of straining against the breeze, they finally have the wind at their backs.