A major offshore wind project planned for Massachusetts is in trouble and may fail. AVANGRID, developed of the proposed 1,200-MW Commonwealth Wind project has asked state regulators for a month’s delay in reviewing the power purchase agreements for the project.
The developer, a subsidiary of Spanish utility Iberdrola, said, “A one-month suspension in the proceeding provides a needed opportunity for AVANGRID, the Massachusetts Electric Distribution Companies, state and regulatory officials, and stakeholders to evaluate the current economic challenges facing Commonwealth Wind and assess measures that would return the project to economic viability including, but not limited to, modest changes to the PPAs.” Department of Public Utilities dockets 22-70, 22-71, 22-72.
The company said the request for changes in the PPAs is “In response to the unprecedented economic challenges facing all major infrastructure projects, including historic price increases for global commodities, sharp and sudden increases in interest rates, prolonged supply chain constraints, and persistent inflation….” The company’s lawyers, in their formal motion for the stay, said, “As a result, the project is no longer viable and would not be able to move forward absent amendments to the PPAs,” suggesting “cost saving measures, tax incentives under the newly enacted Inflation Reduction Act, an increase in the PPA prices, and improvements to Project efficiencies” to rescue the Commonwealth Wind project.
The project was selected in the third round of the state’s competition for leases to develop offshore wind. The Commonwealth Wind project was planned for operation in 2027 when awarded the lease, but that may have slipped to 2028. Mayflower Wind, a 400-MW project that was the other winner in the state’s third round, said it supports Commonwealth Wind’s petition.
Other offshore wind projects in the state include Beacon Wind LLC (OCS-A 0520), Bay State Wind (OCS-A 0500), and Vineyard Wind (OCS-A 0501). Beacon is a planned 2,400-MW project with completion in 2028; Bay State Wind, 2,000-MWs planned for 2026; and Vineyard is a planned 840-MW wind farm scheduled for operation next year. Construction began in 2021.
One of the most notorious offshore wind projects was the failed Massachusetts Cape Wind farm, planned for 454-MW in Nantucket Sound just under 5 miles from Cape Cod. Announced in 2006, the project generated fierce push-back from many, frequently wealthy and influential, local residents. The project became entrained in local politics, generally supported by Democrats statewide, and opposed by Republicans. The project died in 2017.