We can’t afford to ban offshore wind developers
Don't over-penalize companies that want to cancel existing contracts
THE CONSTRUCTION OF VINEYARD WIND this year is a turning point for the Commonwealth and the country. By this fall, energy from the nation’s first utility-scale offshore wind project will begin to flow to the New England grid. It’s a big win for our climate targets, but we need many more offshore turbines spinning to reach our 2030 climate goals, let alone reach net-zero by 2050.
This is the moment for Massachusetts to build on its progress and maintain its position as the nation’s offshore wind leader so we can achieve our climate goals and create high-quality jobs and economic opportunity. To do so, we need to adapt to a changing world. Our leaders in the Healey-Driscoll administration and in the House and Senate are well-positioned to take on this challenge.
The developers of Commonwealth Wind and SouthCoast Wind – two critical projects following Vineyard Wind – have said that the revenues from the projects’ existing fixed-price contracts will not enable financing and construction. They are facing unpredictable market dynamics that have made it far more challenging to deliver these large infrastructure projects than originally planned. These market realities are unfortunate and certainly not where anyone imagined we would be in 2023.
However, unless we adapt, we risk missing our critical climate targets for 2030. Despite this urgency, some policy makers want to preclude developers from participating in the next bidding process if they cancel an existing power purchase contract. These contracts are already designed with significant financial penalties to highly disincentivize cancellation. Developers who opt to cancel will have paid dearly for that decision and not done it lightly. Restricting their future market participation hurts ratepayers, climate targets, and our potential economic development.
Restricting them from bidding might be trivial if there were many leaseholders bidding to develop. But, as of today, there are only four. Massachusetts does not have the luxury of precluding the participation of any developer prepared to build the offshore wind energy resources we need.
Our leaders must work side by side with all the developers. They must understand the dynamics at play in the burgeoning US offshore wind industry and do what they can to ensure clarity for all stakeholders before we move into the next procurement round.
To keep our state climate goals on track, the upcoming offshore wind solicitation must remain open to any developer interested in submitting a bid. Doing so will ensure that competition continues in this important market and the best prices and economic investments come forward.
Offshore wind is positioned to be the workhorse of our clean energy economy, providing affordable clean power for our homes, businesses, and transportation networks. Being a leader in this new industry will bring high-quality jobs and new economic development, particularly lifting areas of the state that have long waited for revitalization. Offshore wind can also provide reliable local energy to inoculate us against fossil-fuel shortages and price spikes driven by global factors outside our control.
For decades, we’ve understood the promise and potential for offshore wind in Massachusetts. Now is the time to retain, not constrain, this potential market.
Susannah Hatch is director of clean energy policy at the Environmental League of Massachusetts.