Eversource moving into offshore wind
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Eversource Energy is moving into the offshore wind energy picture in Massachusetts.
In January 2015, the company's predecessor, Northeast Utilities, was one of two utilities that terminated their power purchase agreements with Cape Wind, an energy project planned for Nantucket Sound that has never gotten off the seafloor due to financing and legal challenges and local opposition.
Now, Eversource is teaming up with DONG Energy on an undertaking with brighter prospects - the Bay State Wind project planned for deeper waters well off the coast of Martha's Vineyard.
The company that transmits and delivers electricity and natural gas to more than 3.6 million customers in Connecticut, Massachusetts and New Hampshire has acquired a 50 percent ownership interest in the project, the News Service has learned. Officials did not disclose financial aspects of the acquisition.
"We are encouraged by the dramatic progress that Europe is making in the offshore wind market. Wind technology is rapidly advancing, output is increasing and prices are dramatically dropping," Lee Olivier, a strategy and business development executive at Eversource Energy, said in a statement. "Now is the time to bring that progress here to New England, and we are thrilled to be partnering with a developer who has such a successful track record."
While they plan to jointly develop, construct and operate the project, the companies are divvying up the work, with DONG Energy handling the offshore wind responsibilities and Eversource taking on the onshore transmission aspects.
The project would be located about 15 to 25 miles south of Martha's Vineyard in an area where industry interests are gearing up to compete for development rights in connection with a state-managed offshore energy procurement.
In August, Gov. Charlie Baker signed a law that requires state utilities to purchase 1,600 megawatts of offshore wind power by 2027. DONG officials expect the first state-led procurement process under that law to begin in June 2017 and the first power to be delivered from offshore wind in the "early 2020s."
DONG Energy in April 2015 secured project development rights to a 300 square mile area that was made available for lease by the U.S. Bureau of Ocean Energy Management (BOEM). Other companies are expected to compete to develop projects in the same area.
In October, the BOEM announced that nearly 80,000 acres offshore New York will be offered in a Dec. 15 commercial wind lease sale. The federal agency also said 14 companies had qualified to compete in the lease sale.
"Offshore wind has great potential in the U.S., and I am very pleased that we are entering into a strategic partnership with Eversource to develop our first project in New England," Samuel Leupold, CEO of DONG Energy Wind Power, said in a statement Wednesday. "Offshore wind will add to the diversity, and the security, of Massachusetts' energy mix."
DONG launched its first offshore wind farm in 1991 and the company says its wind division has built more than a quarter of the total offshore wind capacity in the global market.
After an official announcement is made, DONG Energy and Eversource plan to discuss their joint business arrangement with media at 10 a.m. Wednesday.
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