Massachusetts approves first offshore wind project south of Martha’s Vineyard

Energize Weekly, May 1, 2019

Massachusetts’s first offshore in project, two 400-megawatt (MW) installations in an area south of Martha’s Vineyard, has been given a green light by state regulators.

The project by Vineyard Wind, which will sell its electricity to four distribution utilities, was approved by the Massachusetts Department of Public Utilities (DPU).

The DPU found that the projects were cost effective and in the public interest and would create jobs in the state. The state Department of Energy Resources and the state attorney general also supported the project.

“The approval of these contracts is an important step toward the completion of the largest offshore wind project in the country, which will significantly reduce greenhouse gas emissions, provide Massachusetts residents and businesses with cost-effective clean energy and promote economic development,” Gov. Charlie Baker, said in a statement.

The two wind farms will be built in an area that begins 12 nautical miles south of Martha’s Vineyard and 13 nautical miles southwest of Nantucket.

The first 400-MW installation is scheduled to go into operation in January 2022 and the second in January 2023.

Four utilities—NSTAR, an Eversource Energy company; two National Grid subsidiaries, Nantucket Electric and Massachusetts Electric; and Fitchburg Gas and Electric Light—will purchase all the electricity under 20-year power purchase agreements (PPAs).

The cost of the electricity average for the two projects over the life of the PPAs will be 8.9 cents a kilowatt-hour.

The cost for Phase 1 electricity is 7.4 cents a kilowatt-hour, and the price for Phase 2 is 6.5 cents a kilowatt. There is a 2.5 percent annual increase in the contract.

“These contracts will provide fuel diversification in the Commonwealth and enhance reliability of the regional system, continuing the Commonwealth’s practice of leading the nation in innovation and renewable energy,” DPU Chairman Matt Nelson said in a statement.

Vineyard Wind and the customer utilities said that the project will support 3,600 full-time equivalent jobs and create an estimated $1.3 billion in net benefits for customers.

“The Department has recognized that estimates of employment potential contain uncertainties and actual benefits could be different from projections,” the DPU said in its ruling. “Nevertheless, there is no dispute that the construction and operational phases of the Project will result in additional employment.”

In March 2019, Massachusetts Eversource and Unitil submitted a second request for bids for another 800 MW of offshore wind generation. Bids will have to be below Vineyard Wind’s Phase two bid of $65 a megawatt-hour.

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