Offshore wind moving too slowly

Faster buildout will mean greater savings, jobs

GOOD THINGS COME to those who wait” is an old phrase extolling the virtues of patience.  When it comes to bringing offshore wind energy to Massachusetts, it is advice we should ignore.  We shouldn’t wait a moment longer than we need to.

As of right now, Massachusetts is proposing to wait and bring offshore wind energy to market at a pace that is much slower than it needs to be.  That could mean the state’s consumers pay more than it has to for the power while Massachusetts is lapped by other states looking to be the Northeast hub of the industry.   For Massachusetts and offshore wind, the time is now.  Delay only means higher costs and lost opportunity.

Last year, Gov. Charlie Baker and the state Legislature made a landmark commitment to procure 1,600 megawatts of clean, offshore wind energy within the next decade.  Once all 1,600 megawatts are built out, it will be enough energy to power almost a million homes every year.  As part of the process to make that commitment a reality, the state’s largest utilities and the Department of Energy Resources  recently issued a draft request for proposals from offshore wind developers who are bidding to build the first project 15 miles off the coast of Martha’s Vineyard and Nantucket.

The draft request for proposals states that the offshore projects wouldn’t have to be online and operating until January 2027 – more than a decade after the legislation was passed.  Such a delay will cause the cost of projects and the clean energy generated from them to be higher than if the projects were online sooner.  In addition, thousands of jobs and economic development would be delayed while we postpone reducing greenhouse gas emissions.

Aside from the benefit of generating clean energy sooner, why should the state move faster?  There are several important reasons:

  • Cost benefits — The earlier projects are selected, the better chance those projects have of using a higher level of the federal investment tax credit, which declines with each year.  With its current schedule, the state risks pushing projects into qualifying for the 2019 tax credit level instead of the 2018 level.  This will result in as much as $80 million in higher project costs for the developer, and that is ultimately reflected in the price consumers pay.   The higher federal tax credit support will allow projects to be more competitively priced and lead to direct ratepayer savings.
  • Seasonal impacts — Working offshore is highly seasonal, so even a few weeks delay can result in missing a whole year of working time on a project.  Naming the winning bidder in mid-2018 instead of early 2018 increases the risk of missing 2018 offshore work season.
  • Jobs and economic benefits for Massachusetts – Because of its large and landmark commitment to offshore wind energy, Massachusetts stands to be a major hub for economic activity in the industry – from construction to manufacturing. Waiting years to get these projects in the waters could mean that other states like Rhode Island, which already has the first offshore project, or Maryland, which recently awarded 368 megawatts of contracts to two projects would take the leading positions in this new industry and benefit from more private infrastructure investment and job creation.  Massachusetts already has a port in New Bedford that is ready for developing and building offshore wind.  Waiting to build projects using this port would be a lost opportunity for in the Massachusetts’ economy.

A shorter process should be easily achievable for the offshore wind developers.  Each of the eligible developers will have had sufficient time to submit competitive proposals.

Meet the Author
As the Department of Public Utilities reviews the draft request for proposals with the intent of approving it at the end of June, it should shorten the timeline for bidding and selecting projects, and require projects to be in service no later than 2023.   For the sake of lower prices and the state’s economy, there is no reason to wait.  Offshore wind is ready to work for Massachusetts.

Erich Stephens is the CEO of Vineyard Wind, one of three companies competing to build an offshore wind project 15 miles off the coast of Massachusetts.