SouthCoast Wind keeps hedging on its viability
Cites financial challenges but insists it can move forward
IS SOUTHCOAST WIND, the proposed wind farm off the Massachusetts coast previously known as MayFlower Wind, fully committed to the power purchase contract it agreed to with the state’s utilities?
A review of SouthCoast’s regulatory history suggests its owners – Shell New Energies and Ocean Winds North America – are worried the project is no longer economically viable under the agreement because of inflation, rising interest rates, supply chain difficulties, and the war in Ukraine
But SouthCoast has never been willing to say that clearly. Over the last five months, SouthCoast has continuously hedged its bets, acknowledging the economic challenges it faces but never saying the wind farm is no longer viable. Industry insiders say SouthCoast appears to be playing nice with state regulators while letting Commonwealth Wind face criticism for its actions – all the while hoping to piggyback on Commonwealth Wind’s bid to terminate its power purchase agreement.
In May 2022, SouthCoast and Commonwealth Wind, a wind farm being developed by Avangrid, completed negotiations with the state’s three utilities on power purchase agreements for their projects, and moved on to the Department of Public Utilities for final approval.
Seven days later, SouthCoast filed a motion supporting the one-month delay. “A suspension at this time is needed and appropriate because, under the current [power purchase agreements, or PPAs], the resource may no longer be economic and financeable without adjustments to the PPAs,” SouthCoast said.
On November 4, the DPU rejected the bid for a delay and ordered both Commonwealth Wind and SouthCoast Wind to decide whether they were going to move forward or withdraw.
Three days later, SouthCoast said it was moving forward even as it stated that its power purchase agreement is “under the impact of current extraordinary global economic conditions.”
Commonwealth Wind on December 16 moved to terminate its power purchase agreement. Seven days later SouthCoast reaffirmed its commitment to move forward, even as it acknowledged the validity of Commonwealth Wind’s position.
“Notwithstanding the firm commitment [to move ahead] expressed above, [SouthCoast] Wind respectfully must nonetheless agree with much of the factual analysis underlying Commonwealth Wind’s conclusion, especially as [SouthCoast] is subject to these same facts, pressures, and realities,” the wind farm developer said.
The Massachusetts Department of Public Utilities gave final approval to the power purchase agreements of both wind farms on December 30. Avangrid went to court, while SouthCoast watched and waited.
Rhode Island officials got wind of SouthCoast’s hedging and demanded answers on whether the wind farm’s plan to bring electricity ashore in Rhode Island was still moving forward.
Sen. Michael Rodrigues of Westport, the Senate’s top budget official, recently called for Commonwealth Wind to be barred as a bidder on future wind farm projects if it fails to follow through on its current contract. Asked about SouthCoast Wind, the senator said the company had committed to him that it intends to honor its contract. “I have no reason to doubt that,” the senator said.
CommonWealth reached out via email to SouthCoast on Monday, asking whether the wind farm developer was still on board with building the wind farm under its existing power purchase agreement. The email referenced rumors that SouthCoast officials had told state officials privately that it can’t build under the existing agreement, essentially the same message that Commonwealth Wind conveyed in seeking to terminate its power purchase agreement.A spokeswoman for SouthCoast emailed a response later in the day: “SouthCoast Wind has no comment at this time.”