Project Selected to Bring Offshore Wind Energy to the Commonwealth

Source: By Katie Gronendyke, Office of Governor Charlie Baker • Posted: Thursday, May 24, 2018

BOSTON – The Baker-Polito Administration today announced that Vineyard Wind was selected by the Commonwealth’s Electric Distribution Companies to move forward to contract negotiations as part of the offshore wind energy procurement authorized byAn Act Relative to Energy Diversity, signed by Governor Baker in 2016. The ultimate procurement of 800 megawatts (MW) will represent the largest single procurement of offshore wind by any state in the nation. Today’s announcement is an important milestone for an initiative that will ultimately spur economic development along the coast, ensure a resilient energy future for the Commonwealth and secure progress toward greenhouse gas reduction requirements.

Additionally, through Massachusetts’ leadership in competitively soliciting for offshore wind energy, the State of Rhode Island today announced it will enter into contract negotiations with Deepwater Wind to procure 400 MW of offshore wind energy. By collaborating regionally on efforts to lower electricity costs, increase reliability, improve fuel security, and reduce greenhouse gas emissions, Massachusetts and Rhode Island are working to bring a total of 1,200 MW of clean, local offshore wind to New England’s electric grid.

“Today’s announcement brings the Commonwealth one step closer to achieving our administration’s goals of creating a clean, reliable and cost-effective energy future for Massachusetts residents, and significantly reducing greenhouse gas emissions to combat climate change,” said Governor Charlie Baker. “By positioning Massachusetts as a hub for the emerging offshore wind industry, this competitive procurement will ensure the Commonwealth continues to lead the nation in innovation and renewable energy generation.”

“The procurement of competitively priced and locally produced offshore wind energy will help the Commonwealth reduce greenhouse gas emissions and create economic growth while addressing the needs of our communities,” said Lieutenant Governor Karyn Polito. “This selection will allow Massachusetts to capitalize on the economic benefits of an emerging industry, creating high-quality jobs and providing cost-effective power for ratepayers.”

The Vineyard Wind bid was selected for contract negotiation based on criteria established under a Request for Proposals (RFP) previously subject to public comment, and reviewed and approved by the Department of Public Utilities. Criteria used in the evaluation of the bids included an economic evaluation of the benefits for ratepayers, the project’s ability to foster employment and economic development in the Commonwealth, and the project’s environmental impacts and the extent to which a project demonstrates that it avoids or mitigates impacts to natural resources and tourism. As a result of a stringent review, Vineyard Wind was determined to provide the greatest overall value to Massachusetts customers by delivering approximately 800 MW of offshore wind capacity per year while providing substantial ratepayer benefits.

“The procurement of 800 MW of offshore wind energy will significantly help the Commonwealth transition to a diversified energy portfolio and achieve the emissions reductions targets set forth by the Global Warming Solutions Act,” said Energy and Environmental Affairs Secretary Matthew Beaton. “This nation-leading announcement is an important milestone in our procurement process to secure the largest amount of renewable energy in Massachusetts’ history, reducing energy costs and strengthening the state’s clean energy economy.”

The deployment of offshore wind will also have a benefit on the Commonwealth’s economy and workforce. A recent report by the Massachusetts Clean Energy Center  found that the deployment of 1,600 megawatts (MW) of offshore wind is estimated to create between 2,270 and 3,170 job years – defined as one person working full-time for one year – during construction over the next ten years and generate between $675 million and $800 million in direct economic output in Massachusetts.

In order to ensure the development of offshore wind off the Massachusetts coast does not negatively impact the environment and the Commonwealth’s fishing industries, the Baker-Polito Administration has supported several offshore wind-related studies and continues to work with a Fisheries Working Group (FWG) created to ensure the commercial and recreational fishing industries are able to provide input into the federal permitting process related to offshore wind. Additionally, the Administration has communicated directly with the Department of the Interior and the Bureau of Ocean Energy Management that the siting process for wind turbines in federal waters must include consideration of natural resources and important marine ecosystems and industries. Furthermore, the Administration will work with federal agencies to establish a Southern New England Fisheries Science Panel on Offshore Wind.  The panel would be comprised of respected scientists from New England assist in the development, collection, evaluation, and peer review of scientific information relevant to the development and operations of the wind and fishing industries; identify key informational needs; and make recommendations regarding studies, surveys and monitoring that will assess key environmental and industry interaction issues.

Per statute, a competitive solicitation was announced through issuance of the RFP on June 29, 2017 for 400MW to 800MW per year, which represents approximately 2.7-3% and 5.5-6% of Massachusetts’s total annual electric load. Today’s selection of projects concludes a thorough review by the Department of Energy Resources, Eversource, National Grid and Unitil, which was closely monitored by an Independent Evaluator, jointly chosen by the Department of Energy Resources and the Attorney General, who was responsible for overseeing the process to ensure that all proposals were evaluated in a fair and nondiscriminatory manner.

“Massachusetts is committed to leading the nation in creating a clean, affordable and resilient energy future while being a leader in the U.S. offshore wind industry,” said Department of Energy Resources Commissioner Judith Judson. “This project reduces our dependency on fossil fuels while boosting the local economy.”

The final acceptance of the bid and award of contract is conditional upon successful contract negotiations between the parties and the regulatory approval at the Massachusetts Department of Public Utilities (DPU). At the time of contract filing with the DPU, a public report will be provided by the soliciting parties that details the evaluation process.  Separately, the Independent Evaluator will prepare and submit a detailed public report on the evaluation process and outcome.

If the bid selected to advance to contract negotiation at this stage does not successfully negotiate contracts, it may result in other bid(s) being selected to advance to contract negotiations.  Final project selection as a result of successful contract negotiation will be made public following submittal for regulatory approval. More information on the selected project, process, and timeline can be found here.

This announcement builds upon the Baker-Polito Administration’s ongoing efforts to grow the Commonwealth’s clean energy economy and meet our greenhouse gas emission reduction targets. In August 2016, Governor Baker signed into law bipartisan comprehensive energy diversification legislation requiring utilities to competitively solicit and contract for approximately 1,600MW of offshore wind and approximately 1,200MW of clean energy. Under Governor Baker’s recently filed environmental bond bill, DOER would be directed to create a new clean peak standard for electricity suppliers to increase the usage of clean energy during periods of high, carbon intensive, and expensive electricity demand. The administration’s new solar incentive program, Solar Massachusetts Renewable Target (SMART), will support an additional 1,600 MW of solar in Massachusetts, nearly doubling the amount installed as of today at half the estimated pricing of existing programs.