OER, DEM and Commerce RI support Revolution Wind contract in advisory opinions

THE R.I OER, R.I. DEM AND COMMERCE RI endorsed the Revolution Wind Farm and the contract between National Grid Rhode Island and Orsted in advisory opinions Friday. / BLOOMBERG NEWS FILE PHOTO/ERIC THAYER
THE R.I OER, R.I. DEM AND COMMERCE RI endorsed the Revolution Wind Farm and the contract between National Grid Rhode Island and Orsted in advisory opinions Friday. / BLOOMBERG NEWS FILE PHOTO/ERIC THAYER

PROVIDENCE – The R.I. Commerce Corp., the R.I. Office of Energy Resources and the R.I. Department of Environmental Management filed advisory opinions on the proposed National Grid Rhode Island contract with Orsted US Offshore Wind Friday with the R.I. Public Utilities Commission.

All three entities supported the contract in their opinions.

The project will feature up to 50 wind turbines creating 400 megawatts of energy and is expected to be operation by 2023, if approved. The price of the energy proposed in the contract was 9.8425 cents per kilowatt hour for 20 years.

The R.I. Commerce Corp. endorsed the project, citing third-party estimates that the project will result in $500.5 million in indirect, direct and induced spending. Direct expenditures were estimated at $306.1 million.

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The project is expected to have a one-time increase in Rhode Island gross state product of $282.2 million. When operational, it was estimated to contribute $8.1 million to GSP annually.

The construction of the turbines is expected to create 2,767 person-years of employment over the three-year construction period (a person year is equivalent to the hours that one person would work for a year if employed full time). Subsequently the project was estimated to create 86 full-time equivalent jobs. The jobs were estimated to create $6.7 million in state personal income taxes from jobs related to the project, $2.9 million in state sales taxes related to workers’ taxable household spending and $1.8 million in state business taxes.

The advisory noted that Commerce’s third party, Appleseed, had reached different figures from what Navigant had in its 2018 report. Appleseed expects greater direct and indirect economic impact from construction and operations combined, with higher expectations for construction impact and lower impact from ongoing operations.

Commerce RI said that Orsted made a number of commitments to Rhode Island. Orsted and Commerce expect to sign a memorandum of understanding on April 5 to establish a co-working relationship and to further supply chain development in the state.

Orsted agreed to serve as an anchor company in the SupplyRI program, the state’s business-to-business service, and the company said that, when appropriate, it will engage the Rhode Island Manufacturer’s Association to ensure local companies bid on supply chain projects.

The company also agreed to maintaining and growing its Rhode Island co-headquarters, pledging to ensure that two or more members of the executive management team are based in Rhode Island. The company also will convene and host a meeting of its offshore wind global leadership in Rhode Island in the next two years.

In its report, Commerce RI noted that the state is set up to support cluster development around the build-out of the project and other wind farm projects, and that the manufacturing sector is also positioned to engage the supply chain.

The Office of Energy Resources concluded that the project and contract will result in “significant energy, economic and environmental benefits for years to come,” calling the project a “gamechanger.” The OER said that it found that the contract will reduce long-term energy costs for local ratepayers, diversify the state’s energy mix and reduce regional carbon emissions. It also said the project will result in $40 million in investments to the state’s ports and $4.5 million in investments to local education institutions.

The OER also concluded that the construction and operation of the Revolution Wind Farm will “greatly exceed its costs to local consumers,” and urged the PUC Commission to approve the contact.

The contract’s pricing was also found to be competitive with other recent renewable resource rates, including solar and land-based wind energy.

The DEM’s advisory opinion recognized that the project will have potential environmental impacts and recommended long-term, comprehensive monitoring of the project as well as monitoring of mitigation efforts over the life of the project. The DEM will recommend mitigation measures to the Coastal Resources Management Council while it conducts its review.

The DEM also acknowledged that the project could have significant localized impact on marine and avian organisms, and could result in changes to commercial and recreational fishing activities. However, the department concluded that the overall impact of the project is expected to be positive, in part due to the “substantial reduction of regional fossil fuel generation and lower emissions of nitrogen oxides and carbon dioxide.”

The DEM estimated that the project will reduce Rhode Island carbon dioxide emissions by 617,810 metric tons over 20 years.

Chris Bergenheim is the PBN web editor. Email him at Bergenheim@PBN.com.

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