Connecticut joins the offshore wind rush
Connecticut has officially entered the offshore wind energy world.
The Department of Energy and Environmental Protection Wednesday awarded its first offshore wind project to Deepwater Wind for a 200-megawatt installation in the area it owns about half-way between Montauk, N.Y. and Martha’s Vineyard. It could begin providing electricity to the state by 2023 – enough to power about 100,000 homes.
The renewable and clean power solicitation also awarded fuel cell and anaerobic digester projects totaling about 50 megawatts. But it’s the prospect of offshore wind that created the most excitement and anticipation not only for its renewable energy, but also for the economic development potential that comes with it.
“Connecticut today is showing the region that it wants to participate in the budding offshore wind market and will share in the benefits of being an early mover in adopting this technology,” said Emily Lewis, a policy analyst at Acadia Center in a statement released by multiple environmental groups and unions. Acadia has been advocating for offshore wind for several years. “We hope the state continues to build on this commitment by setting an ambitious offshore wind mandate that creates a sustainable offshore wind industry and continued economic growth.”
John Humphries, the lead organizer for the Connecticut Roundtable on Climate and Jobs, said in the statement that the decision showed the state is serious about getting a piece of the offshore wind job action ramping up in the region.
Connecticut’s decision brings to 1,400 megawatts the amount of offshore wind projects approved by three New England states in just the last few weeks. It is being watched carefully nationally as well.
Nancy Sopko, director for offshore wind at the American Wind Energy Association, called it “a golden opportunity for heavy manufacturing companies and shipbuilders to invest in American jobs, factories and infrastructure.”
Deepwater wins another round
Deepwater is the group that developed the nation’s first – and so far only – offshore wind project in late 2016: five turbines providing 30 megawatts of power to Block Island. It has projects in the works for Long Island and Maryland and just last month was awarded a 400-megawatt project for Rhode island.
Connecticut’s project piggybacks on Rhode Island’s, providing an economy of scale and lower prices – which are confidential — that got it over the finish line first.
“It demonstrated that this buying in bulk and moving with our neighbors to leverage the collective procurement – is to the benefit of Connecticut ratepayers,” said Rob Klee, DEEP’s commissioner.
What also sold Connecticut on the Deepwater proposal were commitments that it would create 1,400 direct and indirect jobs and other economic benefits. They included a $15 million investment in refurbishing the port of New London to handle staging and other industrial needs for this and future offshore wind projects.
Deepwater also committed to workforce development initiatives, a research partnership with UConn at Avery Point, local partnerships with the city of New London and most uniquely a promise to contract with a local boatbuilder to build a transfer vessel for work crews.
“This particular offshore wind project – investments in the state pier and the manufacturing supply chain, really made it one of the great opportunities for offshore wind,” Klee said.
Deepwater Wind vice president Matthew Morrissey said Connecticut seemed to have done something very savvy in issuing its request for proposals when it did and how it did – riding the volume coming out of Massachusetts and Rhode Island and the price reductions that come with it.
“We were able to offer the state of Connecticut very aggressive pricing and at the same time offer an investment to essentially help Connecticut punch above its weight in offshore wind projects,” he said.
Deepwater is one of three groups that own wind lease areas off New England, all of which bid for the state’s blessing to provide power to a state. The two not selected by Connecticut were Vineyard Wind, which last month was awarded an 800-megawatt project by Massachusetts. The other was Bay State Wind – a 50-50 partnership of Orsted, a powerhouse Danish offshore wind company and Eversource. That leaves Bay State with no projects so far.
Thomas Brostrøm of Orsted and Lee Olivier of Eversource said in a statement they were disappointed, but not surprised because of the tie-in to the earlier Massachusetts and Rhode Island bids. “We remain fully committed to developing offshore wind in the United States, and together we plan to pursue future solicitations in New England and New York.”
Klee said it was just the beginning of offshore wind procurement in New England and the Northeast. “There’s plenty of opportunity,” for the Bay State group he said. “We run these multiple procurements and the costs keep coming down.”
Wednesday’s offshore wind announcement and the recently approved $15 million bond funding for the port of New London to handle potential offshore wind work brings Connecticut into a growing fold of East Coast states committing to offshore wind as a renewable energy option, long a staple in Europe, but a newcomer here.
But it still leaves the state behind its neighbors in terms of commitment to wind as an energy resource as well as an economic development potential. The 800-megawatt project for Massachusetts is just half of its 1,600-megawatt offshore wind mandate by 2027 – a mandate that is likely to be increased dramatically by that state’s legislature.
New York has mandated 2,400 megawatts by 2030 and New Jersey’s new governor wasted no time in committing to 3,500 megawatts by 2030.
Connecticut has no such mandate and had also structured its proposal process to cap the amount of offshore wind power as opposed to other states that ran or plan to run offshore wind-only solicitations that set minimums rather than caps — with the potential to go much higher.
“What I think is really interesting is it’s starting to shape up as what I think will be a regional competition. Every state is going to try to be the biggest,” said Stephanie McClellan, director of the University of Delaware’s Special Initiative on Offshore Wind. “The most exiting part about this — with 1,400 megawatts of offshore wind going in — that is the scale that actually starts to drive costs down.
“It’s scale and state action that are the secrets to success,” she said.
Massachusetts and to a lesser extent, Rhode Island, are farther along on those fronts. Massachusetts rebuilt its New Bedford port several years ago, constructing a $113 million Marine Commerce Terminal that can handle the heavy offshore wind development loads. It, along with ports in Rhode Island, have already been used for staging for the Block Island project. And Massachusetts long ago secured commitments from Massachusetts offshore wind developers to use it, though it’s widely believed many ports will be needed to accommodate the amount of staging space anticipated. Massachusetts has also identified 18 other ports in the state that would be suitable for offshore wind-related industry. New London does have the benefit of a wider, better-dredged harbor with no overhead restrictions or the constricting hurricane barrier New Bedford has.
Massachusetts has also actively and successfully been recruiting all types of on-shore major industry related to offshore wind. And it’s already established workforce-training programs at several of the state’s college campuses. Officials have made a number of trips to Denmark to learn how it, as a small country, was able to become the offshore wind‘s international on-shore industry powerhouse.
But the offshore wind potential in federal waters – that’s three miles offshore – these projects represent is just starting to be tapped. (Block Island is in state waters except for a tiny sliver of it.)
The lease areas already purchased off New England and New York alone can handle close to 8 gigawatts – nearly four times the power from both units of the Millstone Nuclear Power Station in Waterford. More lease sales are planned for the region and the federal Bureau of Ocean Energy Management is exploring the potential for even more. A recent study by the Clean Energy States Alliance on behalf of New York, Massachusetts and Rhode Island determined offshore wind projects from Maryland to Maine could create 40,000 jobs by 2028.
There are lease areas under active development off New Jersey, Delaware, Maryland, Virginia, North Carolina and South Carolina.
For the rest of the proposal, Connecticut selected four fuel cell projects out of 20 proposed – two from Fuel Cell Energy totaling about 22 megawatts, one from Bloom Energy and a nearly 20-megawatt project known as the Energy Innovation Park in New Britain. It will be a multi phase project powered by Doosan fuel cells that will supply combined heat and power to area businesses – including Stanley Black & Decker. Phase one is expected to create more than 400 direct and indirect jobs.
This is a long-awaited win for the state’s homegrown fuel cell industry, which has come up short in recent clean energy proposals. That slight has not helped the largest fuel cell company headquartered here – Fuel Cell Energy – which laid off 17 percent of its workforce after its last failed state bid. And just last week its quarterly report showed it had missed targets, sending stocks on a nearly double-digit percentage nose-dive.
Fuel cells have never been a darling in the environmental community. While they are clean – producing heat and water byproducts that can be used for other purposes – they are not renewable. Fuel cells use natural gas to create the hydrogen needed to produce power.
But Connecticut has seen them as a valuable electricity source in urban areas with limited space and as backbone generation for microgrids that can run when grid power is out.
One of four anaerobic digester projects submitted was selected: Turning Earth’s Southington food waste project. It has been on the books for several years and is fully permitted and ready to go.
DEEP also noted that it plans another clean energy solicitation this summer – the so-called Millstone solicitation in which the nuclear plant will be allowed to compete against other renewables. The hope in the environmental community is that the offshore wind prices will be low enough to beat out Millstone.
Especially with all of offshore wind’s economic benefits, said Francis Pullaro of RENEW Northeast, “If the offshore wind prices are as good as being touted, we can expect to see offshore wind ramp up pretty quickly.”
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