PROVIDENCE – A significant Massachusetts offshore energy project faces additional headwinds following a decision Thursday by a Rhode Island state agency to not issue an approval for power transmission lines to run from the turbine farm through Ocean State waters.
SouthCoast Wind Energy LLC, formerly known as Mayflower Wind Energy LLC, wants to develop an offshore lease area in federal waters about 30 miles south of Martha’s Vineyard. The company intends to build 147 giant turbines that will generate more than 2,400 megawatts of power for Massachusetts. SouthCoast is a joint venture comprised of Shell Renewables and Energy Solutions and Engie and EDP Renewables.
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SouthCoast had proposed two transmission cable corridors to run from the turbines off the Vineyard. One of the cable corridors runs through Rhode Island waters before making landfall in Massachusetts at Falmouth and Brayton Point, while the other corridor is Massachusetts waters.
SouthCoast needed approval from the R.I. Energy Facility Siting Board before it could proceed with construction of the transmission cable corridor that would snake through Rhode Island.
It was not to be.
On Thursday morning, the EFSB said it had reviewed the evidence, found the project to be economically unsound, and issued a stay that will hold up any further consideration of SouthCoast power lines through the Ocean State until Oct. 1, 2024.
SouthCoast CEO Francis Slingsby remained optimistic that the company would weather the setback and remained committed to completing the wind farm.
“We are disappointed by today’s decision but remain confident that we will build our offshore wind project and deliver its benefits to the people and communities of Southern New England,” Slingsby said in a statement. “While this one aspect of permitting is temporarily on hold, we continue to advance our permitting with federal, Rhode Island, and Massachusetts state and local bodies.”
A spokesman for the EFSB could not be reached for comment. The R.I. Coastal Resources Management Council, which must hand up a recommendation to the federal Bureau of Ocean Energy Management before the cables can be installed, did not respond to multiple calls and emails requesting comment or further information.
At a hearing on Jefferson Boulevard in Warwick, the EFSB found that the SouthCoast Wind Farm was not financially viable because the company does not have assurances that it would be granted power purchase agreements guaranteeing revenue for the financing of the wind farm.
The agency said SouthCoast lacks a revenue stream to finance the construction of the turbines and transmission facilities to which the cables would be connected, thereby rendering moot any decision the EFSB could render now.
The EFSB said any further proceedings will be stayed until Oct. 1, 2024, or until SouthCoast successfully applies to lift the stay. That would require SouthCoast to negotiate a power purchase agreement before the date to show that it can finance any facility to which transmission lines would be connected.
The EFSB’s decision places the beleaguered project in further jeopardy. SouthCoast’s troubles underscore the difficulties of launching a robust offshore green power sector in the United States.
In June, SouthCoast notified the EFSB that it planned to terminate its Massachusetts power purchase agreements. In a hearing in Warwick, Slingsby maintained that the power purchase agreement energy contracts – which the company signed with utility companies in 2019 and 2022 and had agreed to honor as recently as May – needed to be terminated due to “unforeseen economic challenges.”
Under grilling by R.I. Public Utilities Commission Chair Ronald Gerwatowski, Slingsby suggested that the project’s backers were having second thoughts, saying many shareholders were not able to achieve the returns to make the investment attractive.
The entire global offshore wind industry, Slingsby said, is being rocked by costs that are between 20% and 30% higher than forecast. The price of steel, copper and rare earth metals alone has contributed 10% of that increase. Inflation and skyrocketing interest rates have made financing difficult and much more expensive.
Contact PBN staff writer Sam Wood at Wood@PBN.com.
(UPDATES include only one cable corridor will run through Rhode Island waters and SouthCoast Wind Energy notified the R.I. Energy Facility Siting Board that it planned to terminate its Massachusetts power purchase agreements rather than petitioned the EFSB.)
(Correction: An earlier version of this story gave an incorrect number of wind turbines proposed for the SouthCoast Wind Energy project. It is 147 turbines.)
So Glad RI put a stop to wind turbines – keep at it !!!! Good job !!!!