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Energy and the Environment

Mass. becomes dirty word in Maine referendum fight

Mass. becomes dirty word in Maine referendum fight

Bay State hydro deal irks those opposed to power line

CORPORATE SURROGATES for Massachusetts have spent close to $17 million so far battling a referendum question in Maine that seeks to block the importation of hydroelectricity from Quebec using a power line running through wilderness areas in the western part of the state.

The referendum battle is in some ways the dark underbelly of a push for clean energy in Massachusetts. Two years ago, after regulators in New Hampshire nixed a similar power line running through the White Mountains, Massachusetts struck a deal with a Maine utility and Hydro-Quebec to run a 145-mile transmission line from the Quebec border down to Lewiston, where it would feed into the regional power grid.

The deal would give Massachusetts relatively cheap renewable energy while leaving all of the environmental impact in Maine. Pete Didisheim, advocacy director at the Natural Resources Council of Maine, said many residents in his state are seething with anger at how Massachusetts could force this unwanted project on them.

“The Massachusetts component of this project really gets in people’s craw,” Didisheim said. “We’re just the landscape across which this extension cord will go.”

Didisheim said the three utilities who negotiated the contract on behalf of the state of Massachusetts should have gone with a similar proposal in Vermont that would have run the power line from Quebec underneath Lake Champlain and underground where it came ashore. Didisheim said the three Massachusetts utilities, with the blessing of the Baker administration, went with the cheaper option running the power line above ground in Maine.

The power line through Maine won a key permit from the Maine Public Utilities Commission in May 2019, a decision that was upheld this year on an appeal to the courts. The referendum question seeks to overturn the commission’s decision and deny the permit.

The key players behind the project are Central Maine Power, a utility owned by Avangrid Renewables, which in turn is owned by a Spanish company, and Hydro-Quebec, a utility owned by the province of Quebec. A group calling itself Clean Energy Matters has spent $10.5 million to back the project and defeat the referendum – with almost all the money coming from Avangrid and Central Maine Power. A second group, called Hydro-Quebec Maine Partnership, has spent $6.2 million, with all of the money coming from Hydro-Quebec.

The message of project proponents is centered around the economic and environmental benefits of the project. Building the power line will generate 1,600 construction jobs, increase the state’s gross domestic product by $573 million, and reduce greenhouse gas emissions in New England by 3 million metric tons. There are also benefits tied directly to the project — $6 million for education programs, $140 million for electric rate relief, $200 million for the energy grid, and $15 million each for electric vehicle infrastructure, heat pumps, and broadband infrastructure in western Maine.

“The entire cost of the project will be paid for by Massachusetts ratepayers. And that’s not just us saying it, it’s how the law was written. Period,” according to the website of Clean Energy Matters.

The Natural Resources Council of Maine said the $16.8 million spent to date by project proponents far exceeds the $9.4 million record amount spent in 2018 by out-of-state casino companies seeking support for a casino in Maine. The environmental group said the money has gone for advertising, polling, lawyers, private detectives, political consultants, and an opposition research firm.

All of that money and the additional funds that are likely to be spent between now and November is coming indirectly from ratepayers of three Massachusetts utilities – Eversource, National Grid, and Unitil. The Bangor Daily News has reported Hydro-Quebec stands to make $12.4 billion and Central Maine Power $2.9 billion over the 20-year life of the contracts with the three utilities.

Jon Breed, executive director of Clean Energy Matters, said the opposition to the power line through Maine is coming primarily from three out-of-state companies – Nextera Energy, Calpine, and Vistra – operating gas-fired power plants in the state. Breed said even the Natural Resources Council of Maine has received some money from a fossil fuel-funded-group called Stop the Corridor, which refuses to disclose its source of funding.

Dan Dolan, the president of the New England Power Generators Association, said Massachusetts’ messy entanglement in another state’s internal politics could be avoided if Massachusetts placed a price on carbon and then allowed power-generating companies to compete to supply electricity rather than doing one-off deals for individual projects.

The hydro deal has divided the environmental community, which believes clean energy is desperately needed to combat climate change but worries about the long-term environmental and economic benefits of hydro. Elizabeth Henry, the executive director of the Environmental League of Massachusetts, calls the hydro project a “modest step” in the right direction during a climate crisis.

“But our future can’t be powering New England with Canadian hydro,” she said. “Our future is powering the region with offshore wind and solar.”

Maine Superior Court Judge Thomas Warren on June 29 issued a decision allowing the referendum on the ballot question to proceed, even though he appeared to share the concerns of Maine’s secretary of state that a referendum overturning a project-specific regulatory decision upheld by the courts could face a serious constitutional challenge on separation-of-powers grounds.

Warren, however, said he couldn’t preempt the holding of the referendum, which means the project could theoretically be voted down by voters and then be thrown out as unconstitutional by a judge.

New transmission infrastructure needed for offshore wind

New transmission infrastructure needed for offshore wind

Aging coastal grid must be upgraded for industry’s expansion

EARLIER THIS MONTH, Attorney General Maura Healey posed a fundamental question to the Department of Public Utilities. Now that Massachusetts has proclaimed a goal of net-zero carbon emissions by 2050, how do we get there? Implicit in Healey’s question is our recognition that the entire world must do this together. If we don’t, Boston and all the other great coastal cities will soon find themselves underwater.

In the face of global catastrophe, we see a glimmer of hope. Within the past two years, the US offshore wind energy industry has grown from 1,600 megawatts of commitments in Massachusetts alone to just under 30,000 megawatts of state commitments from Maine to Virginia. That’s enough electricity to power New England.

To think about 2050 for real is to think big – 30,000 megawatts of offshore wind is a good start, but we need 300,000 megawatts in order to transition our East Coast energy system to renewables. An industry of 300,000 megawatts would mean half a million new jobs, a chance to put social justice front and center on our coastlines, and over a trillion dollars of private investment in our energy infrastructure.

Such numbers may be hard to imagine from where we currently stand, but we have been watching the world change by orders of magnitude for a couple of years now. In January 2015, after the decline of the Cape Wind Project, federal offshore wind leases sold for around a dollar an acre. By December 2018, they were selling for $1,000 an acre.

Massachusetts leadership in 2016 on offshore wind gave rise to a new US industry that has outstripped every expectation. Ironically, Massachusetts in 2020 now finds itself struggling to think big within this once bold framework. As other states move forward with their own offshore wind plans, it is natural to wonder how these initial projects will set the stage for the larger build-out that will get us to 2050.

Do we have a vision for a modern, integrated offshore/onshore transmission system? The answer is, not yet. Offshore wind developers are compelled by their position in the competitive market to act on a project-by-project basis, minimizing costs without considering the long-term implications of today’s decisions. But as the industry keeps growing, it is time for Massachusetts to reframe the transmission discussion to encompass the entire 12,000 megawatt capacity of the offshore lease areas.

Offshore wind developers’ eagerness to claim landing spots, or points of interconnection, should be a clear indicator to public-sector decision makers that accessible and economical interconnection points are a precious resource. If they are not handled with care, their scarcity could hamstring the offshore wind industry well before its full potential is realized and leave underserved coastal communities without a voice in the energy transition.

In a regionally coordinated system, points of interconnection would be designed to service multiple wind farms and multiple states. Future points of interconnection would be designed considering the transmission system as a whole and relevant stakeholder input. New England states, offshore wind developers, and utilities would work together to standardize offshore transmission elements.

The timing is perfect for stimulus from the federal and state governments to drive change by supporting the coordination and build-out of an ocean grid transmission system. Such a system can help ensure the success of US offshore wind and make our aging coastal grid more secure and resilient. A great first step would be to move the first utility-scale 800 megawatt offshore wind project, Vineyard Wind, into construction as soon as possible. At the same time, we must invest in the rigorous evaluation of future build-out scenarios for 2030, 2040, and 2050 and we must recognize that onshore points of interconnection are critical to how we scale offshore wind.

Technology and markets alone will not solve this for us. Infrastructure touches all of our lives. It is our public good. And while we have successfully structured a market to lower the cost of offshore wind, that market must also be framed to include our aspirations for a safe, prosperous, and equitable 2050.

Eric Hines directs the offshore wind energy graduate program at Tufts University, where he is the Kentaro Tsutsumi professor of the practice in structural engineering.

Putting land for solar off-limits could hurt farmers

Putting land for solar off-limits could hurt farmers

70 projects already underway would be shelved

AT A TIME when our country is already in the grips of a global pandemic and social unrest, a disagreement over an obscure solar policy may seem unimportant – trivial even. But this summer, Massachusetts is threatening to tie the hands of its farmers by making it much more difficult for them to host solar farms to help stay in business.

With Massachusetts unemployment at a staggering 15.1 percent and the likelihood that up to 70 solar projects currently underway or planned for future investment would be shelved—along with hundreds of jobs and millions of dollars already invested—the regulations underway will have unintentional but long lasting economic and environmental effects on the Commonwealth’s already hard-hit agricultural sector.

First, a little background: last summer, the Massachusetts Department of Energy Resources (DOER) began a review of its Solar Massachusetts Renewable Target (SMART) program. Then this April, the Commonwealth issued regulations that would double the size of the program, but at the same time make as much as 90 percent of land in Massachusetts unavailable for community solar projects that have become an economic lifeline for many of our farms.

Ostensibly, these regulations were drafted to protect open space and address concerns in rural communities in the western part of the state that solar projects have not always taken community needs into account. But the reality is, these new rules make both challenges harder.

Farming is an important part of the Massachusetts economy, providing direct employment to nearly 26,000 people and producing $475 million in goods annually. But most of our farms are small operations that are family owned and highly sensitive to the economic disruption brought on by COVID-19. That’s why many Farm Bureau members are interested in hosting solar farms to stay in business.

Whereas farming is typically seasonal, with profits greatly impacted by the weather and markets, income from solar can help stave off financial stress, providing financial viability and additional, year-round, predictable income. Most important of all, solar arrays are temporary – and can be removed when the solar lease expires, and the land readily converted back to agricultural use. The same cannot be said about any other form of development available to farms.

Farmers aren’t the only ones feeling the economic pinch from the state’s new regulations. Also left out will be the people who benefit from community solar – homeowners and renters who can’t mount solar panels on their rooftops, businesses and nonprofits that want to meet sustainability goals, and schools and municipalities that want to use clean energy to save taxpayers money. Indeed, whether it is upgrades to the electric grid, tax revenue to local municipalities, or electricity savings for consumers, each community solar project typically provides between $4.5 million and $7.5 million in economic benefits.

By contrast, making it harder to site solar on farm land will reduce revenue for cities and towns that were already preparing for historic budget shortfalls in the face of COVID-19. It will drive up energy costs for some Massachusetts consumers who pay the highest electricity costs in the continental US – many of whom have lost their jobs. And, it will put an estimated 1,500 more people out of work.

Ironically, even the environment loses out in these new rules. Why? Because while they put more barriers to siting solar on farm and forest land, they don’t do the same for any other form of development. So, if these regulations go into effect as written, it will actually be easier to build a strip mall on farm and forest land than a solar array.

That is why we are hoping the DOER will adjust the emergency regulations to “grandfather” projects that have already spent considerable time and money in good faith to comply with existing rules. We can protect open space without foreclosing on opportunities for responsible solar development. And we can do both in a way that preserves family farmland without harming it.

It’s hard to believe that any of these outcomes were intentional. Renewable energy policy in Massachusetts is increasingly complex – and when you factor in the agricultural and environmental issues at play with solar farms, it becomes an even more difficult balancing act.

But the negative consequences of these new solar rules are real – and will penalize farmers and rural communities, possibly for decades to come. Let’s not take a step back for Massachusetts at a time we can least afford it.

Mark Amato is president of the Massachusetts Farm Bureau, a nonprofit that advocates for and is run by farmers.

Feds release Vineyard Wind environmental assessment

Feds release Vineyard Wind environmental assessment

Project 2,000 turbines along E. Coast over next 10 years

FEDERAL REGULATORS on Tuesday released a detailed, 420-page environmental assessment of the proposed Vineyard Wind project that includes predictions about the future of wind energy along the East Coast and suggests the impact on commercial fishing of six possible wind farm configurations would be roughly the same.

The Bureau of Ocean Energy Management put Vineyard Wind on hold last year to take a look at the project through the broader lens of what’s going on in offshore wind overall along the East Coast.  The resulting assessment, called a supplementl to the company’s draft environmental impact statement, forecasts 22 gigawatts of offshore wind development along the East Coast over the next 10 years, the equivalent of about 2 percent of current electricity production. The analysis estimates as many as 2,000 wind turbines will be installed over the 10-year period.

Vineyard Wind would be located off the coast of Martha’s Vineyard and consist of between 57 and 100 turbines producing 800 megawatts of power. The project is jointly owned by Avangrid Renewables and Copenhagen Infrastructure Partners.

The Bureau of Ocean Energy Management studied the environmental impacts of six different layouts for the wind farm, including one that had not been previously considered. The new layout, put forward by the Responsible Offshore Development Alliance, which represents fishing interests, called for a navigation lane four miles wide cutting through the wind farm area to provide a more direct and safer route for fishing vessels headed primarily from New Bedford to George’s Bank.

The analysis found none of the alternative layouts provided any significant advantage for the fishing industry. “The overall cumulative impacts of any alternative when combined with past, present, and reasonably foreseeable activities on commercial fisheries and for-hire recreational fishing would be major,” the report said. “This impact rating is driven mostly by changes to fish distribution/availability due to climate change, reduced stock levels due to fishing mortality, and permanent impacts due to the presence of structures (cable protection measures and foundations).”

The assessment also found that the configuration with a navigation lane reduced the amount of power produced by the wind farm areas in Rhode Island and Massachusetts by about 3,300 megawatts.

Mark Kresowik, regional director of the Sierra Club, said he compared the new environmental impact assessment released on Tuesday to the one that had been done previously. He said the difference in environmental impacts between the two were minimal.

“What the offshore wind developer has proposed is probably the best,” he said, referring to a proposal to place the farm on an east-west orientation and maintain spacing of one mile between turbines.

The environmental assessment identifies dozens and dozens of impacts from the wind farms off the coast of Massachusetts and others coming along the coast. Five impacts were identified as major – on the area where the power cable from the wind farm comes ashore in Yarmouth, on navigation,on  fisheries, on scientific research, and on military and national security.

Anne Hawkins, executive director of the Responsible Offshore Development Alliance, said she was still studying the environmental assessment. “At a first glance, RODA sincerely thanks BOEM and the Secretary of Interior for considering additional alternatives that would provide much-needed safe transit options for fishermen,” she said in a statement. “As is clear from our previous comments, we also agree with the re-characterization of fisheries impacts as ‘major’ and will provide more detailed comments as to these impacts and the content of the supplemental environmental impact statement in the near future.”

According to the Bureau of Ocean Energy Management, it intends to take public comment on the supplemental environmental impact statement over the next few months and issue a final decision on the best way forward in December.

Vineyard Wind originally said it planned to begin construction this year and complete work in late 2021. The company, which couldn’t be reached for comment on Tuesday, has said it is still committed to the project.

Mass. emission strategies all up in air

Mass. emission strategies all up in air

Referendum on power line challenged in court

THE COMPANY SELECTED by Massachusetts to build a power line delivering large amounts of hydro-electricity from Quebec into the regional power grid at Lewiston, Maine, is asking a judge to block a voter referendum on the project.

Avangrid, the corporate parent of Central Maine Power, which has won a series of approvals for the project from state regulators, said in a court filing that holding a referendum on a decision by the state’s Public Utilities Commission would violate the state constitution.

Avangrid said initiative petitions are designed to give citizens legislative power, but this referendum would not pass or overturn any laws. Instead, the petition would reverse a 19-month regulatory review that concluded the benefits of the project outweighed the detriments.

Tony Buxton, legal counsel for a private industry group backing the power line, said a referendum would give the state a black eye. “Why don’t we change the sign in Kittery from ‘Welcome Home’ to ‘Maine: Where permits mean nothing and referenda are every Tuesday.’ You can’t run a society by referendum,” he said in a statement.

Backers of the referendum campaign said a public vote is the ultimate expression of democracy, and should not be blocked.

The referendum battle is yet another sign of how many of the initiatives being pursued by Massachusetts to reduce greenhouse gas emissions are beyond the state’s control. An offshore wind farm that was scheduled to begin construction last year and start producing electricity in 2022 is now awaiting federal approvals that, if they happen at all, will not come until the end of this year.

Gov. Charlie Baker said recently that COVID-19 put his regional transportation climate initiative along with a host of legislative initiatives on the back burner. The climate initiative would put a price on the carbon contained in automobile fuels and distribute the proceeds to participating states to invest in emission-reducing projects. The states participating in deliberations on the climate initiative have said next to nothing about it during the COVID-19 crisis.

And now the hydro-electricity project is coming down to a do-or-die referendum in Maine. The project would bring hydro-electricity produced by Hydro-Quebec down into Maine via a 145-mile-long power line. The cost of the project is being borne by Massachusetts electric ratepayers, who have agreed to purchase the electricity that would flow over the line for 5.9 cents a kilowatt hour for the next 20 years.

The Avangrid-Hydro-Quebec project won the Massachusetts procurement only after the initial winner, Eversource Energy, failed to secure a key permits for a power line running from Canada down into New Hampshire.

Net-zero target gets mixed reviews

Net-zero target gets mixed reviews

Senator calls it 'silly math' on Earth Day


ENERGY AND ENVIRONMENTAL Affairs Secretary Kathleen Theoharides used the occasion of Earth Day on Wednesday to finalize the state’s new net-zero greenhouse gas emissions limit, but some environmental groups and legislators were disappointed.

The new policy, which was announced by Gov. Charlie Baker in his State of the Commonwealth address back in January, accelerates the state’s decarbonization efforts under the 12-year-old Global Warming Solutions Act.

The new limit calls for statewide greenhouse gas emissions by 2050 to be equal to or less than the amount of carbon dioxide or its equivalent that is removed from the atmosphere and stored annually in Massachusetts. Under no circumstance, however, should the level of emission be greater than 85 percent below 1990 levels.

“Adopting a more aggressive, science-based emissions limit for 2050 and backing it up with a plan to get there sets us on the best path to avoid the worst impacts of climate change while investing in our communities and growing our clean energy economy,” Theoharides said in a statement alongside release of a letter of determination.

The previous emission limits required an 80 percent reduction below 1990 levels by 2050.

The Executive Office of Energy and Environmental Affairs is expected later this year to publish a plan to achieve the new emission reduction requirements. It’s known as the 2050 Decarbonization Roadmap.

Senate Telecommunications, Utilities and Energy Chairman Michael Barrett of Lexington said he had “big problems” with the administration’s announcement.

“All they’ve done today in celebration of Earth Day is moved from 80 percent to 85 percent,” Barrett said. “It’s not what the state Senate wants. Silly math on Earth Day is a letdown. I think they can do better.”

Barrett said he hopes the House and Senate can still reach agreement this year on a net-zero bill, noting that House Speaker Robert DeLeo identified climate change as an issue he still hopes the Legislature can address this year, even if it means extending the session beyond July 31.

The Environmental League of Massachusetts expressed similar concerns with the new targets. The group said it had advocated for an emissions limit of at least 90 percent below 1990 levels.

Healey calls for exploring  expanded carbon pricing

Healey calls for exploring expanded carbon pricing

Recommendation matches what grid operator has been saying

ATTORNEY GENERAL MAURA HEALEY released a white paper on Monday that calls for the creation of a New England task force to explore expanded use of carbon pricing in electricity generation to achieve region-wide greenhouse gas emission reductions.

The white paper’s recommendation is drawing attention because it mirrors what the region’s power grid operator has been saying for years. Healey in the past has been critical of the grid operator, ISO New England, for failing to design a wholesale market system that embraces renewables and moves the region away from reliance on fossil fuels in the production of electricity.

Now, it appears, the attorney general and ISO New England are more in sync.

The wholesale electricity market consists of two major sub-markets. One is a day-ahead energy market, which sets the price for electricity delivered to the power grid the next day. The other is a forward capacity market, which sets prices for what are essentially options to purchase electricity three years out. In both markets, ISO New England estimates how much power is needed and then hosts auctions to fill that need. Between the two markets, generators are expected to recover the cost of constructing and operating their facilities.

Over the last 15 years, the wholesale power markets worked relatively well. Generating plants powered by relatively cheap natural gas crowded out plants fueled by coal and oil. This transformation kept prices in check and reduced greenhouse gas emissions, and all the risks associated with this market change were borne by the power generators.

The guiding principle of the wholesale market is to provide reliable electricity at the least possible cost. But that emphasis on keeping costs low became a problem as state capitols across the region tried to come to grips with climate change, setting ambitious goals for greenhouse gas emission reductions. States needed large amounts of clean, renewable power, but offshore wind and hydro-electric projects have had difficulty breaking into the wholesale electricity markets because they were either too expensive or had huge up-front costs that couldn’t be recouped in the market.

So states like Massachusetts began cutting their own deals with renewable energy suppliers, offering financial incentives to solar developers and 20-year power purchase contracts to hydro-electric and offshore wind developers. These deals, negotiated outside of the wholesale electricity markets, created problems for ISO New England – how do you create a level playing field in a market where power generators are trying to recover their costs while competing against clean energy suppliers with 20-year power purchase agreements that cover most of their costs.

Healey in December launched a campaign to pressure ISO New England to adopt new rules for governing the wholesale markets to promote greater use of clean energy.  “Right now those rules give a leg up to older, dirtier energy sources and make it harder for new, cleaner sources to provide electricity,” said a video Healey released as part of her campaign.

Now a key recommendation of Healey’s white paper – support for exploring carbon pricing – matches up with what ISO New England has been saying for years. The white paper summarizes a symposium Healey hosted in October where stakeholders from across the region met to discuss how to incorporate more clean energy into the power grid. “There was nearly unanimous support for some form of regional carbon pricing that is priced to help create incentives for compliance with the region’s clean energy goals,” the white paper said.

Just last week, Gordon van Welie, the president of ISO New England, said in a briefing with reporters that the best way to incorporate clean energy into the wholesale markets would be by putting a “realistic price on carbon emissions.”

“It will favor the operation of resources that reduce carbon emissions, and drive the clean energy transition desired by the states,” van Welie said. “At the same time, it would improve the overall efficacy of the existing market structure. Carbon pricing has the potential to be a solution that is relatively seamless in implementation, yet effective in helping states meet their renewable energy and carbon reduction goals. To date, there has not been a regional consensus on this approach.”

Healey’s white paper also makes several other recommendations, including a call for the development of electricity rates that better signal the actual price of electricity. Currently, customers pay the same price for electricity no matter when they use it. By charging customers more when demand for electricity is high, the theory is that customers will purchase electricity (run appliances etc.) when demand and prices are low, thus reducing overall demand at peak-demand periods.

Healey’s October symposium and her campaign targeting ISO New England in December were both funded by the Barr Foundation.

Report: Utilities raised concerns on Mayflower

Report: Utilities raised concerns on Mayflower

Worried about failure or substantial delays of wind farm

THE UTILITIES THAT SELECTED Mayflower Wind for the state’s second offshore wind procurement raised serious concerns at several stages of the process about the company’s ability to complete the project by 2025, according to a report by an independent firm hired to monitor the contracting process.

The report by Peregrine Energy Group is heavily redacted in parts, so it’s impossible to know exactly what the concerns were. “The risks were those pertaining to the potential for project failure or, at least, substantial delay to the proposed commercial operation date,” the report said. “This was relevant as to whether the top-ranked bid should not be selected because another bid, otherwise highly ranked, is evaluated as having a substantially higher likelihood of being built.”

According to the Peregrine report, Mayflower ranked tops in the evaluation process with a score of 84.5, followed by a second bidder whose name was redacted who had a score of 84. Three firms – Mayflower, Bay State Wind, and Vineyard Wind – submitted a number of proposals for the offshore wind procurement. Mayflower declined comment.

Concerns about Mayflower’s ability to complete the project were such that Eversource, one of the utilities, pushed for some additional accelerated critical milestone dates in the contract that would trigger penalties if they were not met. The debate over the milestones apparently became heated, with Peregrine raising questions about whether Eversource had ulterior motives.

Eversource, which participated in the selection process, has a financial interest in Bay State Wind – a Mayflower competitor and a company that was also bidding on the offshore wind procurement. Peregrine said in the report that Bay State Wind could benefit if Mayflower failed and the project needed to be rebid.

“While recognizing the development challenges of the Mayflower project and the legitimacy of the [utilities’] underlying concerns, [Peregrine] posed the question of how hard the [utilities] should push Mayflower on this matter,” the report said, referring to the milestones. “Subsequently, the parties achieved a negotiated resolution.”

Despite the controversy over Mayflower, Peregrine indicated the selection process proceeded fairly smoothly, building on the experience gained from previous renewable energy procurements. “It is Peregrine’s assessment that overall the [utilities]fairly negotiated the contracts that have been submitted for the Department’s approval,” the report said

During the bid process, Mayflower offered three basic proposals – one that offered its lowest price, one that offered a slightly higher price but more onshore investment, and one that offered the highest price but the most onshore investment. Mayflower had said the price on all three options was less than what Vineyard Wind bid during the first offshore wind procurement.

In its report, Peregrine said there was great debate among the utilities about how to evaluate the value of Mayflower’s proposed onshore investments. Ultimately, the report said, the utilities concluded the cost for each job created by onshore investments was far too high and didn’t warrant the higher price for electricity.

The utilities reached that conclusion after talking to the Executive Office of Housing and Economic Development about subsidy programs it operates that yield full-time, non-construction jobs at a cost of $5,000 to $11,233 per job. By contrast, the Peregrine report said, the comparable price for the onshore wind investments was $270,000 per job, or $157,000 after taking into account other investments by Mayflower.

Peregrine made one recommendation for future reviews of renewable energy procurements, suggesting that the company monitoring the process be copied on every electronic message made by the parties so it could follow along on a real-time basis. Peregrine did not criticize the utilities for withholding information, but pointed out that real-time access to data and other information would help the process move more smoothly.

Vineyard Wind facing lots of hurdles

Vineyard Wind facing lots of hurdles

Federal regulator suggests 2023 possible start date

A FEDERAL REGULATOR speaking at a conference in Boston on Tuesday posted a slide suggesting Vineyard Wind would be operational in 2023, but the company itself is not saying whether its wind farm will be generating electricity by then.

Vineyward Wind originally hoped to begin construction in 2019 and have half the 800 megawatt wind farm up and running by January 15, 2022, and the remaining half a year later. That timetable was dashed when the Bureau of Ocean Energy Management put the project on hold in August 2019 to allow for a broader review of the cumulative impact of the many wind farms being proposed along the East Coast. Last week, the federal agency said its review of Vineyard Wind would be completed this December.

Jim Bennett, the program manager of the renewable energy program at the Bureau of Ocean Energy Management, gave a slide presentation at a wind energy conference sponsored by the University of Delaware that listed 2023 as the year when Vineyard Wind would be operational. He then quickly added: “Please don’t take these dates as absolutes. They’re estimates based on our regulatory programs.”

The timing issue is significant for the nation’s first large-scale wind farm. Last year, when the project was put on hold, Vineyard Wind said it needed a quick resolution of the federal environmental review or the project might collapse. Since then, the company has indicated its construction plans are moving forward, but officials have declined to comment on how they intend to overcome the many hurdles caused by the regulatory delay.

For example, the power purchase agreements Vineyard Wind signed with the state’s three utilities included project milestones the company is now unlikely to meet. The pricing of Vineyard Wind’s electricity is heavily reliant on federal investment tax credits that are expiring. And Vineyard Wind is also due to receive payments for making its power available to the regional power grid starting in June 2022, a timetable it is now unlikely to meet.

Another uncertainty for Vineyard Wind is what the federal environmental review will conclude. The wind farm developer has proposed a configuration for the turbine layout that is opposed by some fishing groups. If the approach favored by fishing groups prevails, and wider navigation lanes through the turbine area are required by the federal government, that would reduce the number of turbines that could be built and cut into the project’s economic viability.

Michael Clayton, Vineyard Wind’s permitting and compliance manager, who participated in a panel at the conference, declined comment.

Vineyard Wind spokesman Brendan Moss issued a statement on Tuesday saying the company is in regular contact with the state’s utilities about the project delay and also working with the US Treasury Department to preserve the project’s investment tax credit eligibility. He declined to comment on the firm’s agreement with the regional power grid, referring to a statement issued last week by Lars Pedersen, the CEO of Vineyard Wind.

“While we need to analyze what a longer permitting timeline will mean for beginning construction, commercial operation in 2022 is no longer expected,” Pedersen said. “We look forward to the clarity that will come with a final environmental impact statement so that Vineyard Wind can deliver this project to Massachusetts and kick off the new US offshore energy industry.”

Good news, bad news on offshore wind

Good news, bad news on offshore wind

Mayflower price attractive; fed delay confirmed

THE OFFSHORE WIND INDUSTRY took one step forward and one step backward on Tuesday.

The federal Bureau of Ocean Energy Management said its review of the Vineyard Wind offshore wind project would be completed by June 12 and a final decision on the project issued by December 18 – 15 months later than originally projected. That delay, caused by the need to do a cumulative impact analysis of wind farms going up all along the East Coast, is a setback for the industry and a blow to the state’s efforts to reduce greenhouse gas emissions.

The step forward came with the release of power purchase contracts with the state’s second offshore wind farm, Mayflower Wind. As promised, the contracts showed the price of wind-generated electricity is continuing to fall, a promising sign for a state looking for affordable clean energy.

According to documents submitted by state and utility officials to the Department of Public Utilities, the price of electricity generated by Mayflower over the 20-year life of its contracts will be 7.77 cents a kilowatt hour in levelized nominal dollar terms, or 5.85 cents a kilowatt hour in levelized 2019 dollars. The Vineyard Wind price is 6.5 cents per kilowatt hour in 2019 dollars.

Mayflower, a joint venture of Shell New Energies and EDP Renewables, submitted three original bids. One was a low price bid, a second offered a slightly higher price along with infrastructure and innovation investments, and a third offered a higher price along with manufacturing investments. According to Mayflower, all three of its bids featured prices that were lower than Vineyard Wind’s price.

The utilities unanimously chose Mayflower’s lowest-price bid. In their filing with the Department of Public Utilities on Tuesday, the companies said they consulted with the state’s housing and economic development office and concluded the onshore investments in the second and third bids “were not cost effective because the net present value of the investments did not justify the higher contract costs.”

Mayflower estimates its project will generate 5,520 full-time-equivalent jobs in Massachusetts over the 20-year life of the contracts and 930 jobs elsewhere in the region. Officials believe the wind power will reduce carbon dioxide emissions by 6 million metric tons over the 20-year period.

The company also agreed to pay $55 million to the Massachusetts Clean Energy Center, provide $10 million for marine science and fisheries research, $7.5 million for port upgrades, and $5 million to the Cape Light Compact to help reduce electricity bills for customers with annual incomes of less than 80 percent of the state median income.

Mayflower does not expect to start generating power until September 2025. By contrast, Vineyard Wind had promised to begin operation in January 2022, with the remainder of the project coming online in January 2023.

With the environmental review by the Bureau of Ocean Energy Management not expected to be completed until the end of this year, Lars Pedersen, the CEO of Vineyard Wind, issued a cautious statement that confirmed the project would not begin on time.

“While we need to analyze what a longer permitting timeline will mean for beginning construction, commercial operation in 2022 is no longer expected,” Pedersen said. “We look forward to the clarity that will come with a final environmental impact statement so that Vineyard Wind can deliver this project to Massachusetts and kick off the new US offshore energy industry.”

The expected delay in action on the federal environmental review of Vineyard Wind was first reported February 3 by CommonWealth. Members of the Massachusetts congressional delegation have accused the Trump administration of being biased against renewable energy projects, but a spokeswoman for the Interior Department said the delay was necessary and the allegations by the lawmakers were “unfounded and uninformed.”

Both Vineyard Wind and Mayflower are counting on federal investment tax credits that are being phased out. It’s unclear whether the delays will prevent the firms from obtaining the tax credits.

The contracts the wind farm developers have with the state’s three utilities also require the firms to achieve certain milestones or face penalties. In Vineyard Wind’s case, the company was required to open phase one of its project by January 15, 2022. Unless the contract is reopened and the deadline extended, Vineyard Wind could face “delay damages, and, ultimately, contract termination,” according to DPU filings.

Like the Vineyard Wind power purchase contracts, the Mayflower contracts stipulate that the three utilities who negotiated the agreements are entitled to compensation equal to 2.75 percent of the total value of their contracts. The price tag for that provision was not immediately available, but it added up to $168 million on the Vineyard Wind contract.