Massachusetts’ 1,200 MW offshore wind project ‘no longer viable’ (turbulent seas ahead?) – Will you be okay?
By Robert Bradley Jr. – November 2, 2022
“… Rising global commodity prices… sharp and sudden increases in interest rates, prolonged supply chain constraints, and persistent inflation have significantly increased project construction costs.”
Electricity prices are rising due to forced wind, solar and battery power, and duplication, of the power grid. Reliability is going down due to the impact of wind and solar power. And higher interest rates are (furthermore) undermining the economics of infrastructure, the investment required to turn “free” wind and solar into electricity.
It’s a perfect storm that could just overtake taxpayers’ expansion to federal benefits (DOE and IRS) and rate averages for incarcerated taxpayers. With offshore wind testing and uneconomical, the worst can be assumed.
October 30, 2020, article by Colin Young, “Massachusetts’ major offshore wind project is no longer viable“Explain about the fluid situation.
A large offshore wind project in a pipeline in Massachusetts is “no longer viable and will not go forward” under the terms of a contract filed in May. Both developers behind the state’s next two offshore wind projects are asking state regulators to pause review of contracts for a month amid rising prices, supply shortages and rising interest rates. capacity….
The month-long freeze will give the parties the opportunity to assess the current situation of the project and potentially agree on changes to the PPA, among other measures, the developer said. may allow the project to return to viability. “
“As has been publicly reported in recent weeks, global commodity prices have risen, partly due to the ongoing war in Ukraine, sharp and sudden increases in interest rates, prolonged supply chain constraints and inflation. persistent has significantly increased the project construction cost. . As a result, the project is no longer viable and it would not be possible to proceed with the amendments without the PPA,” Commonwealth Wind attorneys wrote in their movements.
The developer brief highlights “cost-saving measures, tax incentives under the newly enacted Inflation Reduction Act, increasing PPA prices, and improving Project efficiency” as possible approaches. possible to restore the viability of the project. The developer also said it “remains fully committed to the project and to providing cost-effective renewable energy from the project to Massachusetts residents and businesses in a way that advances the purposes of the project.” [the state’s clean energy law] and the energy and climate policies of the Commonwealth. “
The Boston Globe reported last month that a top Avangrid executive had told investors that the company expected Commonwealth Wind and Park City Wind (a project intended to provide electricity to Connecticut) to be delayed. a year when they seek to amend the contract. CEO Pedro Azagra said Commonwealth Wind is now expected to be up and running by 2028, Globe reports….
Commonwealth Wind said that “the benefits of the IRA to the project are not fully known at this time and are not anticipated to leave the project without other changes to the PPA,” but told the DPU that it “believes there may be potential opportunities to share the benefits associated with an IRA with bidders and is willing to explore those opportunities with stakeholders. “
It is not clear when the DPU’s decision will be made, but the agency previously set a deadline of Tuesday for summaries related to the latest offshore wind contract….
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The above article is excerpted from New Bedford Lightt, not The New York Times. But if the stalemate continues without additional subsidies from the Massachusetts government or captive bidders, it will deserve national attention.
One can only hope that local bidders reject the associated rate hikes and preserve their shoreline at the same time. And the problems of Commonwealth Wind can serve as a warning that it’s not just nuclear (Plant Vogtle) but offshore wind also poses a significant risk to its developers.
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