Rhode Island Energy denies Revolution Wind 2 bid

Updated at 5:42 p.m. on July 18, 2023

PROVIDENCE – Rhode Island Energy on Tuesday said it will not enter into a power-purchase agreement for Revolution Wind 2: a joint proposal from Orsted A/S and Eversource Energy LLC to add 600 to 1,000 megawatts of new offshore wind power off the state’s coast.

Rhode Island Energy said in a statement the proposal did not meet all the requirements as detailed in the Affordable Clean Energy Security Act. The company said it made the decision after a four-month evaluation of the bid, which was completed in consultation with the R.I. Office of Energy Resources and the Division of Public Utilities and Carriers.

“We recognize some will be disappointed that we didn’t choose to move forward on negotiating this PPA, but that doesn’t mean we are abandoning our commitment to offshore wind in Rhode Island,” said David Bonenberger, president of Rhode Island Energy. “In fact, we are already in discussions with state and regional leaders about new opportunities to bring more offshore wind to the state, which we hope to progress in the coming months.”

Rhode Island Energy’s request for offshore wind bids was a result of the Affordable Clean Energy Security Act passed in 2022, the state legislation requiring that 100% of all electricity sold in Rhode Island be generated from renewable sources by 2033.

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Rhode Island Energy issued a request for proposals in October 2022 with submissions due on March 13. Purchase agreement contracts were to be set between 15 and 20 years.

The company said Tuesday it will provide a comprehensive filing with the R.I. Public Utilities Commission detailing its decision. It will detail elements of why the proposal did not meet the ACES requirement “to reduce energy costs” and other factors that scored low in the evaluation. OER and the division will also file comments, and the bidders will have an opportunity to respond to those findings.

“The economic-development benefits included in the proposal were weighted and valued appropriately by our evaluation team, but ultimately it was determined those features did not outweigh the affordability concerns and other ACES standards,” Bonenberger said.

Gov. Daniel J. McKee said Tuesday his administration remains committed to offshore wind and securing a third offshore wind project.

“While this was not the outcome that we wanted from this RFP process, Rhode Island Energy thoroughly reviewed this project proposal and found that it did not meet the energy requirements of the ACES Act,” McKee said in a statement. “It is essential that any new Rhode Island offshore wind project that is selected for development presents the best outcome for our ratepayers and economy.

“In the upcoming weeks we look forward to working with Rhode Island Energy, the Division of Public Utilities and Carriers and other parties to successfully advance a new offshore wind project procurement under the ACES Act,” McKee said.

Rhode Island Energy said Tuesday that it will continue to support expansion of offshore wind in Rhode Island. Over the coming weeks, it will continue to work with OER, the division and stakeholders on additional ways to bring more offshore wind opportunities to the state that could offer more-affordable pricing.

The company began transmission line upgrades this spring to support Orsted and Eversource’s original Revolution Wind project. A PPA for that project was signed in 2019, with the project expected to be operational in 2025.

Eversource Energy, which had formed a joint venture with Orsted A/S of Denmark to build the massive Revolution 1 and Revolution 2 projects off the coast of Rhode Island, announced in June it was divesting itself of its investment in the turbine infrastructure.

“We’re disappointed that Rhode Island Energy did not select Revolution Wind 2,” an Orsted spokesperson said in a statement. “This project would put Rhode Island’s 100-percent clean energy future in reach, delivering renewable energy to hundreds of thousands of homes and creating more than $2 billion in direct economic benefits to the state, with historic investments in local union jobs, workforce training, ports and the supply chain. We will assess our options for Revolution Wind 2.”

Eversource declined to comment, citing it’s impending departure from the project.

(UPDATE adds a response from Orsted in the second-to-last paragraph and recasts last sentence.)