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Mass. study calls for 1.6 GW of new offshore wind power

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Mass. study calls for 1.6 GW of new offshore wind power

The Massachusetts Department of Energy Resources on May 31 released a study calling for the procurement of 1.6 GW of additional offshore wind power, beyond the 1.6 GW already required under state law.

The study, required by the state's 2018 Act to Advance Clean Energy, found that new offshore capacity would save ratepayers $670 million to $1.27 billion over the life of 20-year contracts versus purchasing the same amount of clean energy on the market.

Solicitations should occur in 2020, 2024 and possibly 2026, the study found, to maintain a "balance between capturing cost effectiveness offered by later procurements with a steady pipeline of solicitations to spur and maintain economic development opportunities."

The study authors cautioned that the cost-effectiveness of any future offshore wind contracts is highly dependent on future changes to the regional renewable energy credit market; if the electric load is higher than forecast in the study — because of greater electrification of transportation and increased heating needs the benefits of procuring offshore wind increase, the study said. But if there are more RECs in the regional market than forecast, because of other states adding more clean energy, then the benefits of procuring offshore wind will be less.

Instead of selling excess RECs above the state's renewable portfolio standard obligations, the analysis shows, utilities should retain the RECs when market prices are low and use them toward emission reduction targets.

Also, with an additional 1.6 GW of offshore wind, more than half of utilities' electricity load will be supplied through long-term contracts instead of the wholesale competitive markets, according to the study.

"This high amount of energy tied up in long-term contracts may impact wholesale markets and may shift risk to ratepayers as energy markets change," the study said. "Flexibility to capture declines in cost and other benefits from changes in technologies could be lost over time."

In 2016, Gov. Charlie Baker signed into law a bill requiring utilities to jointly and competitively solicit proposals for 1.6 GW of offshore wind. The utilities and energy department eventually selected Vineyard Wind LLC's 800-MW Vineyard Offshore Wind Project. On May 23, Massachusetts utilities issued requests for proposals to procure between 400 MW and 800 MW of offshore wind energy as a part of the 2016 law.