THE OWNER OF the Canal Station power plants in Sandwich is telling state regulators it may have an easier way for offshore wind farms to feed their electricity into the regional power grid and save ratepayers as much as $200 million.
Jera Americas Inc., a Japanese company that bought the Canal power plants last year, has a lot of surplus interconnection capacity because its three “peaker plants” are rarely called into service. Jera estimates it could make 1,149 megawatts available 99 percent of the time, which would allow an offshore wind farm to deliver power to the grid direct from the existing connection at the station without the need for expensive upgrades to the electricity system.
Canal consists of three plants – two oil-fired units built in 1968 and 1978 and a third plant that can run on either oil or gas that was built in 2019. The two old plants are rarely used, and only come online when demand peaks.
Jera bought Canal with the idea of using its surplus interconnection capacity to partner with offshore wind developers. The idea didn’t take full form until after the state Department of Energy Resources issued a request for proposals for the state’s fourth offshore wind procurement. As a result, Jera filed its proposal with the Department of Public Utilities asking the regulatory agency to amend the request for proposals to include the option of purchasing surplus interconnection capacity.
John O’Brien, the vice president of government and regulatory affairs at Jera and a former Massachusetts state senator, said the idea is a no-brainer. Currently, offshore wind developers have to build their own connections to the power grid and pay for any upgrades to the system needed to accept the new electricity.
“As more offshore wind capacity comes online, the transmission system becomes more saturated and the cost of network upgrades increases geometrically. Indeed, one proposed offshore wind facility [Vineyard Wind] interconnecting in Barnstable, MA. is facing estimated network upgrade costs of nearly $200 million,” according to Jera’s filing with the DPU.
The Healey administration this week filed an application with the federal government seeking $250 million in federal aid for some $1 billion in upgrades to the transmission system on the South Coast to make electricity interconnections with offshore wind farms easier.
The only cost for wind farms connecting to the Canal Station would be building the transmission line from the wind farm to the station itself, which can be seen from the Sagamore Bridge. O’Brien said the transmission line would need to run up the Cape Cod Canal or on land adjacent to the canal, both of which would face regulatory challenges.
He said the Canal link could be a good proof of concept for selling surplus interconnection capacity, which has only been done once before. He said there are 17 operating power plants between Maine and Washington, DC, that could theoretically do surplus interconnection capacity deals. Offshore wind farms are already tapping interconnection points with the grid at shuttered plants, like Brayton Point in Somerset, for example, the site of a former coal-fired power plant.
Jera’s request to the DPU only asks that surplus interconnection capacity be an option for wind developers. It would still be up to the various parties to strike a deal.