Competing strategies emerge on offshore wind
Eversource, National Grid push different transmission options
TWO VERY DIFFERENT strategies are beginning to emerge as three offshore wind companies prepare to vie for up to 1,600 megawatts of contracts with the state of Massachusetts.
The powerhouse partnership of DONG Energy and Eversource Energy, operating under the name of Bay State Wind, has adopted what might be described as a go-it-alone, bigger-is-better approach. DONG is a Danish company and one of the largest wind developers in Europe. Eversource is a Boston-based utility aggressively trying to expand into the energy business across New England.
Bay State Wind has made no secret of the fact that it wants to land a big contract for at least 800 megawatts of electricity, or half the state’s total procurement. The company also wants to keep the entire project in-house, meaning it will build both the wind farm and the transmission line delivering power to the power grid in Massachusetts.
“Based on European offshore wind projects, we believe the most successful projects are the ones where the developer is responsible for all aspects of the project, including owning the infrastructure. We’re confident this is the best way to ensure a competitive process, which ultimately benefits customers,” said Lauren Burm, a spokeswoman for Bay State Wind.
The Grid paper concluded the “coordinated transmission solution” would be best. Brian Gemmell, vice president for strategy and performance at Grid, said the approach outlined in the paper would keep costs down, reduce permitting time, and ease disruption to the seabed.
The state is currently developing a request for wind farm proposals that is expected to go out in June. Under the legislation authorizing the procurement, the state plans to seek a total of 1,600 megawatts of power over time in stages of no less than 400 megawatts. Three companies own leases for wind farms off of Nantucket – Bay State Wind, Deepwater Wind, and Vineyard Wind.
Rep. Patricia Haddad of Somerset, who spearheaded the Massachusetts legislation, said DONG wants the first procurement to be a large one. “They made that pretty clear throughout the process,” she said. “They feel that would enable them to offer a better price.”
But Haddad said others believe smaller procurements would help spur competition and allow the region enough time to grow the infrastructure needed to take advantage of the jobs and economic activity offshore wind is likely to generate. She said it could make sense to have two initial 400-megawatt procurements.
The whole contracting process in Massachusetts is unfolding at a time when offshore wind development in the United States is showing signs of life. Late last year Deepwater Wind began delivering power from its small, five-turbine wind farm located in Rhode Island waters near Block Island. Then in January Deepwater won a contract to build a 90 megawatt, 15-turbine facility in its leased area off of Martha’s Vineyard that will supply power to Long Island.Statoil, the Norwegian oil company, won a bidding war in December for a tract of ocean off of New York. The bidding went through 33 rounds and lasted two days. DONG was in the hunt for that lease but was edged out by Statoil, which is attempting to become a big player in renewable energy. Statoil paid a whopping $42 million for the lease, far more than the $16 million generated by the federal government’s previous 11 commercial wind leases combined.