Avangrid, SouthCoast cancelled projects seek round 4 revival in 3.6GW Massachusetts tender
Pioneering state that lost nearly all its contracted capacity due to inflationary headwinds now looks to make up lost ground
Massachusetts opened its massive round 4 offshore wind tender for up to 3.6GW recently, the largest ever in New England, but this solicitation will only make up lost ground as the state has seen most of its formerly contracted projects cancelled in recent months.
“With this RfP [request for proposals], Massachusetts is continuing on our path to be a global leader in this growing industry,” said governor Maura Healey.
Massachusetts was an early pacesetter in the US sector and by the end of 2021 had 3.2GW under contract towards its mandate of 5.6GW by 2027.
Both developers blamed surging inflation and rising interest rates for rendering their projects unviable.
Commonwealth agreed to pay fines totalling $49m, and SouthCoast $60m to withdraw them, with both projects looking to resubmit into this new solicitation at more favourable terms.
“SouthCoast Wind is looking forward to the upcoming solicitations throughout New England and is evaluating the impact and value it could bring to Massachusetts, Connecticut and Rhode Island,” Rebecca Ullman, director external affairs for SouthCoast.
The RfP issued by DOER differs from earlier solicitations in several ways, including elimination of the price caps.
Previously, project bids in successive rounds had to come in below the last round’s awards.
SouthCoast (then called Mayflower) was awarded its first 804MW in the state's second tender in 2020 at $77.76/MWh, while the remaining 405MW was procured in 2021 at $75/MWh.
Avangrid plumbed even lower depths with Commonwealth’s average $72/MWh power purchase agreements (PPAs) likewise awarded in 2021.
The state’s round 4 is also placing greater emphasis on economic development and environmental justice and gives points for developer experience and position in the federal permitting regime.
The Bureau of Ocean Energy Management, lead regulator of energy development in federal waters, estimates both Commonwealth and SouthCoast will see final approval this year.
The RfP also makes special note of bidder’s track record in developing similar projects, including “consideration of any project that has been delayed, failed, substantively amended, defaulted under, withdrawn, agreed to termination, or otherwise did not proceed, including on prior longterm contracts.”
While this would seemingly put the two developers at a disadvantage, they are not alone in struggling with economic headwinds.
“The entire global offshore wind industry has been negatively impacted by economic forces beyond its control and that has affected developers and projects here in the US and abroad, including most of the bidders who are anticipated to participate in the upcoming solicitations,” said Ullman.
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