Offshore

Three Northeast states sign the first multi-state offshore wind agreement

Three Northeast states sign the first multi-state offshore wind agreement
FILE - Three wind turbines from Deepwater Wind stand in the water off Block Island, R.I, the nation's first offshore wind farm, Aug. 15, 2016. The governors of Massachusetts, Rhode Island, and Connecticut announced a multi-state agreement Wednesday, Oct. 4, 2023, designed to streamline the selection of offshore wind energy projects. (AP Photo/Michael Dwyer, File)

Massachusetts, Rhode Island and Connecticut today announced New England’s first offshore wind multi-state coordination memorandum of understanding (MOU), which creates a pathway for a potential coordinated selection of offshore wind as each state solicits offshore wind energy generation through their respective state procurements. This MOU is the first of its kind in the United States.

Through this MOU, the three states will together seek multi-state offshore wind proposals that would expand benefits for the region, capture cost reductions by developing projects at scale, and develop into viable projects. In coordinating, the states say they will amplify efforts to foster regional economic development, create high-paying, in-demand jobs, and promote environmental justice and equity. 

The three states request that offshore wind developers submit multi-state offshore wind project proposals for consideration by the soliciting parties through their respective offshore wind procurements for selection in 2024. Combined, the states’ solicitations are for up to 6,000 MW of offshore wind. Actual project selections will depend on states’ individual assessments of proposals’ costs and benefits to ratepayers and other evaluation criteria specified in states’ requests for proposals. Any two or three states may agree to select a multi-state proposal up to each state’s procurement authority and split the anticipated megawatts and renewable energy certificates from a single project.  

The multi-state coordination MOU is an agreement between the Massachusetts Department of Energy Resources (DOER), the Connecticut Department of Energy & Environmental Protection (DEEP), and the Rhode Island Office of Energy Resources (OER).

Pedro Azagra, CEO of Avangrid, Inc, issued the following statement on the announcement of northeast states’ regional procurement for offshore wind power:

“At this critical time for the industry in the United States, as well as the rapid acceleration of the climate crisis, this bold procurement strategy rises to the level of urgency the moment demands while providing offshore wind developers an opportunity to leverage economies of scale that will unlock more competitive bids and the potential for greater investments in local development and job creation,” Azagra said.

The offshore wind industry has been grappling with uncertainties recently, with multiple power purchase agreements (PPAs) coming to an end, and developers and utilities backing out of projects.

Rhode Island Energy recently pulled out of its PPA with Ørsted and Eversource for the Revolution Wind 2 offshore project, citing higher interest rates, increased expenses, and questionable federal tax credits, concluding that the project had become uneconomical.

In July, Avangrid agreed to pay $48 million to pull out of a PPA with Eversource Energy, National Grid, and Unitil for another offshore wind project, the 1,223 MW Commonwealth Wind located 20 miles south of Martha’s Vineyard. Rhode Island Energy, meanwhile, terminated its PPA with Ørsted and Eversource for the offshore wind farm Revolution Wind 2.