Offshore wind competition heats up
One of the competitors for an offshore wind energy license in Massachusetts is teaming up with Avangrid Renewables, adding a partner with financial resources and experience in European wind energy markets.
Vineyard Wind on Tuesday announced that Avangrid Renewables is purchasing a 50 percent ownership interest in the project, which is competing with Deepwater Wind and a partnership between DONG Energy and Eversource to build major wind energy installations in leased tracts 15 miles south of Martha's Vineyard.
An August 2016 state law calls for the procurement of up to 1,600 megawatts of offshore wind energy by 2027.
Avangrid's majority shareowner is Spain-based Iberdrola, a large utility company active in offshore wind, with projects under development or construction in England, France and Germany, according to the companies. Avangrid also has offshore wind lease rights off the North Carolina coast.
Copenhagen Infrastructure Partners (CIP), an infrastructure development fund, owns the other half of Vineyard Wind after last year acquiring the project when it was known as OffshoreMW. CIP also has management and investment stakes in offshore wind projects under construction in Germany and Scotland. Company officials said they'll send executives to join Vineyard Wind's local team in New Bedford, which they said currently includes four people.
In a statement, CIP co-CEO Lars Thaaning Pedersen called the new alliance at Vineyard Wind a "major strategic partnership" and asserted the players and experience now behind the project "give Vineyard Wind a significant advantage in building Massachusetts' first offshore wind project."
In a phone interview, Pedersen said the fast-growing $100 billion offshore wind industry in Europe is more than 20 years old and has "really commercialized over the last five years." Overseas investors are looking to new markets, he said.
"The technology has matured and new markets are opening up, the U.S. being one of them," he said.
Last year, Deepwater Wind's 30-megawatt project off Block Island, Rhode Island -- a project that has received investments from GE Energy Financial Services and the global bank Citi -- became the nation's first offshore wind farm.
Erich Stephens, CEO of Vineyard Wind, said project officials are reviewing a draft request for proposals, developed jointly by electricity distribution companies and the state Department of Energy Resources, that is expected to be finalized by June 30.
"Our objective is to really implement the policy that the Massachusetts legislation put forth last summer as quickly as possible," he said, adding that Vineyard Wind is hoping for shorter timeframes in the RFP process in part to keep costs lower.
The draft RFP calls for 400-megawatt proposals.
Writing in the Standard-Times in April, Stephens said a solicitation seeking one 400-megawatt project every four years would benefit Massachusetts.
"It will drive down the price for consumers three different times, as the law states that each time a wind project comes on line, the price must be lower than the previous project," he wrote. "If, for instance, the state did this in two 800 megawatt phases, the price would only fall once. Four projects of 400 MW will ensure that most jobs stay here, in SouthCoast and in Massachusetts."
Avangrid Renewables is a subsidiary of Avangrid Inc., which has more than $31 billion in assets and operations in 27 states. Avangrid Networks is comprised of eight electric and natural gas utilities, serving 3.2 million customers in New York and New England, according to the company, and Avangrid Renewables operates 6.5 gigawatts of electricity capacity, primarily wind power, in 22 states.
Officials from Deepwater Wind and DONG Energy declined to comment Tuesday on the Vineyard Wind deal.
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