Major Offshore Wind Projects Advance in Massachusetts and Rhode Island
Commercial-scale offshore wind power may soon become a reality in New England. On May 23, Massachusetts electric distribution companies selected Vineyard Wind, a subsidiary of Avangrid Renewables, LLC, as the preferred provider of 800 megawatts (MW) of offshore wind generation to the Massachusetts power market, and Rhode Island selected Deepwater Wind as the preferred provider of 400 MW of offshore wind generation to the Rhode Island power market. Both companies propose to generate the electricity from wind projects they intend to construct on federal leases on the Outer Continental Shelf offshore of Massachusetts and Rhode Island.
Massachusetts Vineyard Wind Project
In 2017, Massachusetts electricity distribution companies initiated a request for proposals (RFP) process to acquire 400-800 MW of offshore wind. The RFP process is provided for in a series of state laws (collectively known as Section 83C) requiring Massachusetts utilities to enter into long-term contracts for approximately 1,600 MW of offshore wind energy by June 30, 2027. Three companies submitted responses during the RFP process, each submitting multiple bids to provide different options.
On May 23, Vineyard Wind’s proposal to build an array of about 100 8-MW turbines (for a total capacity of approximately 800 MW), capable of supplying 5.5-6% of Massachusetts’ energy needs, won the RFP process. According to the proposal, power will be transmitted from the offshore wind facility through an undersea cable to Cape Cod, where it will tie in with existing transmission and substation infrastructure. The project also will incorporate distributed battery energy storage that would provide benefits to low-income residents and public buildings by establishing a “Resiliency and Affordability Fund” in partnership with Citizens Energy. Vineyard Wind would contribute $15 million to the fund over 15 years, with the objectives of fostering the “wide deployment of distributed battery energy storage,” providing credits to low-income ratepayers, and helping to implement energy storage and solar energy projects at public buildings.
Even though Vineyard Wind won the RFP Process, it is not yet over. Final contract negotiations between Vineyard Wind and the Massachusetts utilities are due to conclude by July 2, and a contract will be submitted to the Department of Public Utilities (“DPU”) by July 31, 2018. The DPU will have until December 31, 2018, to approve or reject that contract.
Rhode Island Deepwater Wind Project
In early 2018, Rhode Island directed the state’s utilities to issue a procurement for up to 400 MW of “clean” energy, including offshore wind. On May 23, Rhode Island selected Deepwater Wind to provide this power though Deepwater’s anticipated construction of a 400-MW wind project on its federal OCS lease, currently dubbed “Revolution Wind.” In addition to local utilities, Rhode Island’s Office of Energy Resources and Division of Public Utilities and Carriers evaluated the RFP submissions to select a winner.
Rhode Island-based Deepwater Wind constructed the nation’s first offshore wind farm, a five-turbine project in state waters offshore Rhode Island’s Block Island. The Revolution Wind project will be over ten times larger, in terms of capacity, and will be located 30 miles from the Rhode Island mainland and about 12 miles south of Martha’s Vineyard. To obtain final state approval to provide the power, Deepwater Wind will negotiate a final contract with the local grid operator, National Grid, which will submit a proposed contract to the Rhode Island Public Utilities Commission for review and approval.
Both developers are working their way through numerous federal, state, and local permitting processes to obtain authorization to construct and operate their projects. Among other things, each project will require authorization from the U.S. Department of the Interior’s Bureau of Ocean Energy Management (BOEM)—the agency that issued the OCS leases to Vineyard Wind and Deepwater Wind—to move forward. This will require compliance with the National Environmental Policy Act, the Endangered Species Act, the Marine Mammal Protection Act, the Coastal Zone Management Act, the National Historic Preservation Act, the Magnuson-Stevens Fishery Conservation Management Act, the Outer Continental Shelf Lands Act, and other related environmental and navigational laws. Both state and local permitting will also be important, with permits required for transmission siting and construction, and for associated onshore facilities.
In addition to environmental concerns, each project will need to address issues related to aviation (in coordination with the FAA), navigation (in coordination with the Coast Guard), and fisheries. Fishing interests present a potential hurdle for offshore wind in the Northeast. Members of the fishing industry from Massachusetts to New Jersey, along with some municipalities, have sued BOEM to invalidate its issuance of an OCS wind lease offshore New York. While Deepwater Wind and Vineyard Wind are in dialogue with fishery interests, the potential for controversy—and related litigation—remains. Nevertheless, Vineyard Wind expects to complete its project in 2021-2022, while Deepwater Wind expects the Revolution Wind project to come online in 2023.
New York and other Atlantic coastal states are also proceeding with plans to procure offshore wind in the near term. Somewhat serendipitously, on May 23, New Jersey enacted new legislation requiring that state to procure 3,500 MW of offshore wind. With Massachusetts and Rhode Island most likely to see the first “steel in the water,” and with strong investments in offshore wind port facilities in southeastern Massachusetts, New England is poised to lead the way in the push to develop offshore wind resources in the U.S.
Beveridge & Diamond's Natural Resources & Project Development Practice Group represents clients during renewable energy and Outer Continental Shelf project development, renewable energy permitting, and related litigation. For more information on how these developments may impact your business, please contact any of the authors of this article, or your usual Beveridge & Diamond contact.