“Why was there only one bid in response to Rhode Island Energy’s RFP if offshore wind is desirable (politically) and key to decarbonizing our economy? Was it because inflation and high-interest rates caused developers to hesitate over whether they could earn a reasonable profit?”
Last October, Rhode Island Governor Dan McKee announced a request for proposals (RFP) for offshore wind procurement in compliance with a new law. The law required the State’s primary utility company, Rhode Island Energy, to seek to contract up to 1,000 megawatts (MW) of new offshore wind generating capacity at market-competitive rates.
This offshore wind procurement has the potential to satisfy 30% of Rhode Island’s estimated 2030 electricity demand. When added to the 30-MW Block Island Wind farm and the contracted 400-MW Revolution Offshore Wind 1 project, the state will have secured about half of its projected energy needs from offshore wind. …
“With two of the three projects in trouble, Massachusetts will not meet its clean energy goals, and when they do, the power prices will be higher than expected…. The energy chaos in the state is getting interesting with significant implications for the offshore wind business.”
The ongoing saga of Commonwealth Wind’s future took another twist in late January when it filed with the Massachusetts Supreme Court a petition to set aside the order by the Massachusetts Department of Public Utilities (PUC) issued on December 30, 2022, approving the Power Purchase Agreement (PPA) prices negotiated with the three local utilities purchasing the electricity.
The challenging, worsening economics have upset the future of the project. Avangrid, the developer of the Commonwealth Wind project, wishes to renegotiate the PPA prices or to have them rejected by the PUC which would then allow Avangrid to rebid the project’s output in the next Massachusetts wind power solicitation scheduled for this spring.…
“Last year, every offshore wind equipment manufacturer reported substantial financial losses as raw material costs, order delays, labor problems, and antiquated manufacturing plants overwhelmed their revenue gains. Correcting these problems necessitates higher equipment prices, reduced manufacturing capacity, and/or relocating to lower-cost countries. These steps can set back delivery times and delay project start-up dates. Developers are also finding that building Jones Act-compliant installation and support vessels are taking longer and costing more, further challenging their projects’ economics.”
On Day One, Joe Biden canceled the Keystone XL pipeline construction permit issued by the Trump administration, costing union jobs. He rejoined the Paris Agreement on Climate Change so John Kerry could have a job. It was no secret where this administration was heading.
Days later, Biden issued an Executive Order calling for the nation to build “a new American infrastructure and clean energy economy that will create millions of new jobs.”…