In committing Connecticut to joining Massachusetts and Rhode Island in jointly purchasing power to be generated by offshore wind, Gov. Ned Lamont is offering a boost to an industry battered by rising construction and financing costs.
Standing beneath a massive windmill blade on the State Pier in New London, Lamont said Wednesday that wind power remains central to the region’s effort to move away from fossil fuels, despite recent setbacks.
Avangrid, the developer of Connecticut’s largest proposal for offshore wind, announced Monday night that rising costs have made the Park City Wind project too expensive to deliver power at contracted rates promised to utilities.
“We’ve got some challenges there,” Lamont said. “Some of them related to supply chain, some of them related to interest rates. And you take that into account, but you have to have a core belief that you think the wind is going to be a key piece of our state’s future, our region’s future, and our country’s future when it comes to a carbon-free power that you can really count on at a reasonable price.”
Joining the governor was Joe Nolan, chief executive of Eversource, the utility that sold its share of some leased offshore wind sites off the coast of Massachusetts for $625 million to its wind partner, Ørsted, and David Ortiz, the Ørsted government affairs chief.
“At Eversource, building clean energy technologies to create a more reliable energy grid is a top priority of ours. It is something that is important to our customers and more importantly to the state of Connecticut,’’ said Nolan, whose company sponsored a sustainable energy conference Wednesday at UConn.
But for the foreseeable future, those efforts by Eversource remain mostly on land, focused on transmission.
“We have a finite amount of money, obviously,” Nolan said.
In addition to the three-state memorandum of understanding signed Tuesday, Lamont also announced the publication of Connecticut’s first “strategic roadmap” for economic development in the offshore wind industry. It will be supported by a new nonprofit, the Connecticut Wind Collaborative.
“And this roadmap will really chart the course for the years to come. We think it’s a really great continuing signal,” said Ortiz, the Ørsted executive. “We believe that the future of this industry in the United States and in Connecticut is bright.”
Cost overruns on the expansion and modernization of the New London pier, which Ørsted plans to use as a staging area for offshore wind projects over the next decade, was an issue Republicans used against Lamont in his 2022 reelection. Eversource had been partner in the pier project.
But Lamont said Wednesday that Connecticut is playing a long game on wind, and the pier improvements will contribute to the region’s economy after Ørsted is finished shipping components off shore.
The potential for a multi-state solicitation came up in May when Massachusetts first announced a new offshore wind solicitation. Connecticut had indicated in March that it too was planning to procure more offshore wind, but offered no time frame.
The Massachusetts announcement actually included language about a coordination announcement in the fall if states choose to work together.
“The latest proposed RFP was drafted to allow for flexibility in Massachusetts’ procurement timeline and possible coordination with other New England state should they seek their own procurements,” a spokesperson for the Massachusetts Department of Energy Resources said then. “We’ll continue to be in dialogue with neighboring states throughout the process and communicate with potential bidders through the proposed Coordination Announcement.”
Since then, the solicitation by Rhode Island for offshore wind that drew only one bidder was rejected. And in July, Connecticut offered a draft version of its own solicitation, indicating just yesterday that its final version would be available soon.
But multi-state energy coordination in New England goes back even farther. In 2018 Connecticut’s first offshore wind project – now known as Revolution Wind – was designed specifically to piggyback on a procurement by Rhode Island so both states could achieve economies of scale. Those projects are proceeding.
The multi-state coalition, New England for Offshore Wind, NE4OSW, has long advocated for multi-state procurement, as recently as July calling for it again in the wake of the Rhode Island decision to reject it’s only bid. So Wednesday’s announcement was overdue and welcome for Amanda Barker, who is the Rhode Island lead for NE4OSW and with the Green Energy Consumers Alliance.
“We need to find a way to ensure that we go forward with offshore wind but also ensure fair energy prices for ratepayers,” she said. “We really saw and still see a joint procurement as that solution, because it will allow states to sort of pool resources together and hopefully get developers to bid larger bids and get economies of scale to bring the price down that way.”
To the question of what took so long, she said that is a question for the governors.
“These states are not islands. We have a regional grid,” Barker said. ‘We all need to work together to bring offshore wind online at scale. We’ve seen the value since the beginning on states working together and we’re happy it’s finally coming to fruition.”
The Business Network for Offshore Wind also applauded the three-state MOU, noting it too had been pushing for bigger scale procurements.
“However, we were not thinking big enough, said Liz Burdock, founder and CEO, in a statement. “Procurement at this scale is exactly what industry needs to solve some of its most pressing issues. Big scale drives real cost reductions, fosters a pipeline large enough for new manufacturing investments, and should create enough certainty to entice developers and vessel owners to enter into framework agreements that would unlock capital sitting on the sidelines.”
Katie Dykes, commissioner of the state Department of Energy and Environmental Protection, was in the mode of only looking forward.
“So by aligning and shopping together, we expect that we’ll be able to achieve more competition in our RFPs,” Dykes said. “We’ll be able to make joint selection decisions. We think this is the kind of leadership that’s needed to help move the offshore wind investment future forward.”
Lamont offered a simpler, even giddier take on the wind mills taking shape on the pier.
“It is not only awesome, it is massive. I mean, if you think about windmills — little Dutch boys, wooden shoes, think again,” Lamont said. “I mean, this blade behind us here is twice the height of the Goldstar Bridge.”
And he said that in New England, when power demand is high, the offshore winds are strong and reasonably steady.