Go bigger with offshore wind procurement

It would make sense to pick more than one supplier

IN RECENT MONTHS, the Baker administration has taken several important steps toward a clean energy future for the Commonwealth, including bold initiatives to accelerate large-scale clean energy as enabled by the 2016 Energy Diversity Act.

Beyond the state’s recent clean energy procurement, which considered hydro imports, onshore wind projects, and transmission siting, there is a monumental opportunity to diversify the Commonwealth’s energy mix just over the horizon. That opportunity is offshore wind, which over the last decade has taken off in northern Europe–a region with similar wind and ocean resources to the northeast United States.

In April, the Baker administration is scheduled to announce the selection of one or more offshore wind projects from proposals submitted by three companies in response to the competitive procurement of 1,600 megawatts of offshore wind also enabled by the 2016 legislation. This is one of the greatest opportunities of our time to drive new, local renewable energy resources, enhance the Commonwealth’s electricity reliability, and put Massachusetts at the forefront of a burgeoning new industry in the US.  While the Baker administration has indicated in the last several days that there may be a delay in this selection process, any significant delay needs to be avoided, as it could undermine the Commonwealth’s offshore wind leadership position.

The selection will lead to the country’s first large-scale commercial offshore wind projects, the first phase of several competitive procurements which when built will power more than a million homes. When Gov. Charlie Baker signed the Energy Diversity Act in 2016, the 1600 megawatt commitment was the largest to offshore wind in the nation, putting Massachusetts atop the field of states eager to lead the US offshore wind industry and reap the benefits that come from being a first mover.

Today, however, the competition among neighbors is fierce. Earlier this year, New York Gov. Andrew Cuomo set a goal of 2,400 megawatts of offshore wind by 2030 (New York will issue its first RFP this fall), and newly-elected New Jersey Gov. Phil Murray announced a commitment to build 3,500 megawatts in the same time frame. Connecticut is also considering multiple offshore wind projects as part of a recent request for energy projects to bring more clean energy resources to the Nutmeg State.

Being first and being a leader with additional procurements in the coming years will be essential to bringing thousands of jobs in manufacturing, supply chain components, and services, construction, operations and maintenance and in related secondary areas to serve both the Commonwealth’s own projects, and also those of neighboring states. The first state to get steel in the water on a large-scale project will have a competitive advantage in luring industry supply chain companies and the long-term jobs that they’ll bring.

Due in large part to growing demand in the UK and Europe, as well as improved technology and increased competition, the cost of offshore wind has decreased dramatically overseas. If the bids selected in April show competitive prices for ratepayers, the Baker administration should encourage utilities to procure more than the statutory minimum quantity of offshore wind generation, and consider updating a schedule for the second and even third procurements to be accelerated and expanded to exceed the 1,600 megawatt goal. This would send a strong and clear signal that will attract more investment in the burgeoning market.  Additional procurements sooner could also drive down costs even more by enabling developers to take advantage of federal tax credits that expire in 2019.

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Lastly, if we’ve learned anything from this year’s hydro and onshore renewables procurement, it would be smart to select more than one project.  This would reduce the risk that a permit denial or other delay would hold up Massachusetts’ effort to build the nation’s first large-scale offshore wind project and lead the region in the development of a new industry that will serve its residents and businesses for generations to come.

Peter Rothstein is the president of the Northeast Clean Energy Council.