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Massachusetts proposing new offshore wind tenders for 1.6 GW

Offshore wind farm. Photo by: Enersea (www.enersea.nl)

June 3 (Renewables Now) - Massachusetts should launch solicitations for an additional 1.6 GW of offshore wind projects, on top of the initial 1.6 GW authorised by its Energy Diversity Act, the state government recommends.

The Massachusetts Department of Energy Resources on Friday published a study that calls for the state to further expand its offshore wind programme and hold two more 800-MW solicitations in 2022 and 2024, respectively. Another one is also proposed for 2026 in case that not all the targeted capacity is awarded. The additional 1.6 GW should be solicited by 2035, the proposal says.

The Massachusetts Department of Energy Resources (MDER) released a report Friday summarising its study into the state’s approach to offshore wind thus far, and whether it makes economic sense to sign up for more capacity. This recommendation was made after an analysis based on three scenarios proving that such procurement rounds would be cost-effective and would have a net benefit on ratepayers.

More details on the three scenarios in the analysis can be seen in the table.

Scenario Additional offshore wind In-service dates Total net benefit (USD, 2019) Levelised net benefit (USD/MWh, 2019)
Reference case 1,600 MW from current solicitations, No additional ones N/A N/A N/A
Scenario 1 800 MW 2025 1.1bn 16
Scenario 2 1,600 MW 800 MW in 2025 and 800 MW in 2027 670m 2
Scenario 3 1,600 MW 800 MW in 2028 and 800 MW in 2030  1.27bn 13

Among MDER’s recommendations is the conduct of a standalone energy storage solicitation. According to the report, such a move would have a positive effect on the grid by offering flexibility for a range of resources, including offshore wind.

Massachusetts’ Energy Diversity Act of 2016 directed the state’s utilities Unitil, National Grid and Eversource Energy to procure 1.6 GW of offshore wind by 2027. Vineyard Wind, a 50/50 partnership between Copenhagen Infrastructure Partners (CIP) and Avangrid Renewables LLC, was selected in May 2018 as the winner in the first solicitation, securing 800 MW at a cost of USD 65 (EUR 58.2) per MWh, at 2017 rates. The second round of the bidding programme, for another 800 MW, was launched in May and will be open till August 16.

In its report, MDER noted that the expiration of the federal Investment Tax Credit (ITC) at end-2019 is expected to have a short-term impact on the cost of offshore wind, but the cost is seen to decline over time in line with the improvements to technologies and the supply chain. It added, however, that the high amount of power contracted through solicitations for long-term periods may impact wholesale markets and shift risk to ratepayers as energy markets change.

(USD 1.0 = EUR 0.895)

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Veselina Petrova is one of Renewables Now's most experienced green energy writers. For several years she has been keeping track of game-changing events both large and small projects and across the globe.

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