PROVIDENCE – The Mass. Department of Public Utilities approved both power purchase agreements between distribution companies and Vineyard Wind LLC Tuesday, taking the state one step closer to the state’s first offshore wind farm.
The project will provide 800 megawatts of wind power to the state, at an average nominal cost of $89 per megawatt hour over the 20 years of each power purchase agreement. The project will be built in two phases, each of 400MW capacity. The project was split into two phases to increase the project’s attractiveness to investors and to be able to obtain two different tax equity investors for the project, according to footnotes of the public filing.
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The two PPAs apply to each phase with different cost structures and include Vineyard Wind PPA agreements with: Fitchburg Gas and Electric Light Co., doing business as Unitil; Massachusetts Electric Co. and Nantucket Electric Co., each doing business as National Grid; and NSTAR Electric Co., doing business as Eversource Energy.
The approval noted that in the selection process, National Grid was partial to a 400MW facility, while Eversource preferred the 800MW project that has received approval. The Vineyard Wind project is jointly owned by Copenhagen Infrastructure Partners and Avangrid Renewables.
In Rhode Island, the PPA between Orsted U.S. Offshore Wind and National Grid Rhode Island is currently undergoing review by the R.I. Public Utilities Commission. The PPA as proposed would provide electricity to the grid at $98.425 per megawatt hour.
The Boston Globe reported that while the Rhode Island wind project has higher wholesale electricity prices, some in Massachusetts see Rhode Island as a better deal due to promised investments in the local economy, including $40 million in investments to the state’s ports.
Chris Bergenheim is the PBN web editor. You may reach him at Bergenheim@PBN.com.
