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BOSTON (State House News Service) - Amid a bruising stretch of project terminations and minimal competition, Massachusetts will attempt to reinvigorate the offshore wind industry by partnering with a pair of its neighbors.
Gov. Maura Healey plans to announce Wednesday that leaders in Massachusetts, Rhode Island and Connecticut struck an agreement to solicit offshore wind power together in a multistate procurement, a step the governor's office said is the first of its kind in the nation.
All three states are already in the process of acquiring up a combined 6,000 megawatts of offshore wind energy capacity, and a memorandum of understanding their officials signed Tuesday lays out a framework to authorize larger projects that would deliver the clean energy to more than one state at a time.
Officials are hopeful that by banding together rather than continuing to pursue single-state, siloed projects, they can attract more interest from developers and keep projects locked in despite price changes and supply chain struggles that have derailed some plans.
Healey, who intends to unveil the agreement during her keynote address to an offshore wind conference in Boston on Wednesday, said the collaboration will help both the states seeking the energy and the developers who can offer it.
"Working together, through this new agreement: We can align our procurements to leverage our collective buying power. We can lower project costs and maximize benefits for ratepayers across the region. And, we can increase efficiencies and reduce project risk for offshore wind developers," Healey said, according to a prepared version of her remarks. "We can take advantage of the unique economic development opportunities available in each state, so you do not have to establish every component of the supply chain separately. We can complement each other's strengths, and we can win with synergy."
Each of the three participants is still conducting its own procurement and will select a project or projects based on its own laws, but by lining up the timing, the multistate approach opens the door for a developer to propose a project larger than the amount of megawatts any one state is seeking, according to an administration official.
Bidders can submit proposals that are contingent on winning selection from multiple states. The trio of states themselves will have discretion to cover their entire procurement authority with a multi-state project, or instead to combine single-state and multi-state projects within their allowable capacity, according to the MOU.
Any two of the three states can select a multistate offshore wind bid with power capacity up to their maximum procurement authority. Depending on the proposals that developers submit, the region could soon have on the books a Massachusetts-Connecticut wind project, or a Rhode Island-Connecticut wind project, or a project that pledges to deliver clean power to all three states.
Multi-state bids are due Jan. 31, 2024, the same date that bids are due for the current Massachusetts procurement, an official said.
"We want Massachusetts to be the global leader in offshore wind, yes. But we know that true leadership, especially in the energy sector, requires collaboration," Healey said in her prepared remarks. "The clean energy transition can't be achieved in isolation. Our grid is connected, our economies are connected, our futures are connected. We can only win if we win as a region, a country and ultimately a planet."
Multistate proposals "must offer the same price" to all participating states or their electric companies, according to the memorandum of understanding, except for "severable commitments" like economic development investments aimed at specific locations.
Former Gov. Charlie Baker tried to help launch a similar multistate program aimed at curbing transportation emissions, called the Transportation Climate Initiative, but it collapsed amid concerns about its expected impact on gasoline prices. in Massachusetts, seeking up to 3,600 megawatts of capacity with bids due in January.
However, two-thirds of that maximum allowable amount would effectively backfill previous rounds. A pair of 1,200-megawatt projects, Commonwealth Wind and SouthCoast Wind, each opted to liquidate their contracts with utility companies -- and received state approval to do so -- after concluding the projects were no longer financially viable in the wake of economic shifts.
Both developers have signaled they plan to resubmit bids for the projects in the next round with a goal of securing a higher price.
The upheaval has slashed the amount of wind energy lined up in Massachusetts by three-quarters, leaving only the 800-megawatt Vineyard Wind that is expected to begin generating some power this month. State law sets a target of 5,600 megawatts by 2027.
In her prepared remarks to industry leaders, Healey on Wednesday signaled that her administration wants to be a "partner" that will help wind developers navigate a "rapidly changing environment."
"The clean energy transition simply can't wait. And offshore wind represents an opportunity that we simply cannot afford to miss. It is a technology, and an industry, that is an anchor for our state's short-term and long-term success," Healey said. "So I say once again: whatever turbulence this industry may be experiencing, we remain all-in as your partners."
Another factor Healey identified as key to building up offshore wind is federal funding. Massachusetts in May applied for up to $250 million from the U.S. Department of Energy to help upgrade onshore transmission, which would fund construction of two new "points-of-interconnection" in the state's southeastern corner to enable transmission of energy generated offshore, Healey said.
"We expect an award decision soon, and we are already preparing for subsequent funding rounds," she said.
The new tristate agreement is not the first time Massachusetts has taken a regional focus in the campaign to transition to clean energy and achieve net-zero greenhouse gas emissions by 2050.
Massachusetts is one of 12 states in the Regional Greenhouse Gas Initiative, a market-based cap-and-invest program that requires power plants to purchase a limited amount of allowances for the carbon dioxide they emit.
Former Gov. Charlie Baker tried to help launch a similar multistate program aimed at curbing transportation emissions, called the Transportation Climate Initiative, but it collapsed amid concerns about its expected impact on gasoline prices.
Written By Chris Lisinski/SHNS
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