Massachusetts Regulator Approves Long-Term Contracts for 800-Megawatts of Offshore Wind Power

The Massachusetts Department of Public Utilities authorized power purchase agreements between Vineyard Wind LLC and the state’s electric distribution companies Unitil Corp., National Grid plc, and Eversource Energy for a period of 20 years, according to an April 16 press release. The approval is crucial for the developer to start construction by this year and become operational by 2021, taking advantage of the federal tax credit that has been a key factor in offering a competitive price. The wind generation output and renewable energy certificates from the project will be available at a levelized price of 6.5 cents per kilowatt-hour, below the 7.9 cents incurred for buying the same amount in the market.

Last May, the department selected Vineyard Wind’s 800-megawatt project to negotiate contracts with Massachusetts’ electric utilities, following legislation enacted in 2016 that requires competitive solicitations to secure long-term contracts for 1,600 megawatts of offshore wind by June 30, 2027. The project, located in the waters south of Martha’s Vineyard, is expected to be the first large-scale offshore wind farm in the U.S. Vineyard Wind is co-owned by Copenhagen Infrastructure Partners and Avangrid Renewables. Avangrid is owned by Iberdrola SA.

Reinforcing the state’s commitment to offshore wind, on March 31, the utilities initiated a process for the second round of solicitations to execute long-term contracts for up to 800 megawatts of offshore wind power. If approved, the companies plan to launch the solicitation in May, with bids to be submitted in August, project selection in November, and contract execution in December.