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3 developers confirm bids for 2nd Mass. offshore wind RFP

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3 developers confirm bids for 2nd Mass. offshore wind RFP

At least three offshore wind energy developers — Bay State Wind LLC, Mayflower Wind Energy LLC and Vineyard Wind LLC — have submitted bids to Massachusetts' second offshore wind request for proposals for up to 800 MW.

In May, Massachusetts' three electric distribution companies, subsidiaries of Eversource Energy, National Grid USA and Unitil Corp., issued the joint RFP to procure between 400 MW and 800 MW of offshore wind energy. This is the second solicitation by the utilities to meet a state-directed mandate to procure 1,600 MW of offshore wind.

The deadline for confidential bid submissions to the second RFP was Aug. 23, and the three developers all confirmed they had made submissions. Developers have until Aug. 30 to submit public versions of their project proposals. Massachusetts' three utilities and the Massachusetts Department of Energy Resources will evaluate the bids and select the winning projects by Nov. 8, followed by contract negotiations and their submission to the Massachusetts Department of Public Utilities for final approval by Jan. 10, 2020.

The second RFP is offering 15- to 20-year power purchase agreements for offshore wind power supply ranging from 200 MW to 800 MW. The RFP limits eligibility to bids from offshore wind projects on the Outer Continental Shelf that do not have a turbine within 10 miles of an inhabited area. The RFP terms further require the offshore wind project to be in a designated wind energy area where the developer holds a federal lease competitively obtained after 2011.

Mayflower Wind is a joint venture between Shell subsidiary Shell New Energies US LLC and EDPR Offshore North America LLC, a subsidiary of EDP - Energias de Portugal SA. A Royal Dutch Shell PLC spokesperson confirmed in an email that Mayflower Wind is participating in the RFP but declined to go into further detail of their submitted proposals.

Bay State Wind, a joint venture formed by Eversource and Denmark's partially state-owned Ørsted A/S in late 2016 to develop the 2,000-MW Bay State Offshore Wind project 15 miles off Martha's Vineyard, Mass., announced in a news release that it submitted proposals for a 400-MW and 800-MW project in response to the second RFP.

Vineyard Wind, a joint venture between Copenhagen Infrastructure Partners K/S and Avangrid Inc.'s Avangrid Renewables LLC subsidiary, said in a news release that it submitted a 400-MW proposal and two options to develop an 800-MW project. The majority stakeholder of Avangrid is Iberdrola SA.

Vineyard Wind's new proposed project, referred to as Vineyard Wind 2, would be built just south of its 800-MW Vineyard Offshore Wind Project, which won Massachusetts' first offshore wind RFP in May 2018 and is 15 miles south of Martha's Vineyard. Vineyard Wind 2's turbines would be built in rows aligned east-to-west and placed one nautical mile apart from each other, the company said.

Now called Vineyard Wind 1, Vineyard Wind's first project is slated to be America's first utility-scale offshore wind farm. However, the project is facing a setback after the U.S. Department of the Interior's Bureau of Ocean Energy Management, or BOEM, announced Aug. 9 a further delay in the issuance of a final environmental impact statement for the project. In its decision, BOEM said it intended to undertake a supplemental draft EIS process by analyzing the effects of the many offshore wind projects and procurements that are expected to follow the development of Vineyard Wind as part of that extended study.

Vineyard Wind responded to the delay, saying its shareholders have affirmed the company's commitment to building the Vineyard Wind 1 project. However, the developer acknowledged that its original timeline for the project is no longer feasible due to the delay in the EIS process.

Vineyard Wind previously planned to begin construction on its first project in late 2019 and begin operations by 2021 or 2022. Under the company's 20-year power purchase agreements with Massachusetts utilities, Vineyard Wind 1 is required to have 400 MW of nameplate capacity online by Jan. 15, 2022, followed by another 400 MW of nameplate capacity coming online by Jan. 15, 2023.

Lifting the price cap

Vineyard Wind 1's contract price for its first phase starts at $74/MWh, rising 2.5% annually, while the price for the second phase starts at $65/MWh, also rising 2.5% annually. The average nominal cost of the 20-year contracts for Vineyard Wind is $89/MWh.

Under Massachusetts law, each subsequent offshore wind procurement must deliver prices lower than the previous solicitation. Fearful that Vineyard Wind set the bar too low for offshore wind energy prices, Gov. Charlie Baker, a Republican, and the state legislature agreed recently to an amendment to the fiscal year 2020 state budget that eliminated the price cap resulting from the Vineyard Wind contract for additional offshore wind solicitations until 2021, when the price cap will be reestablished.

Another potential bidder, which already holds offshore wind leases in federal waters, is Equinor ASA subsidiary Equinor Wind US LLC. An Equinor project was selected in July in a New York solicitation for offshore wind resources.