Massachusetts offshore wind projects "no longer viable"
Soaring inflation and commodities prices are threatening to sink two major wind projects off the coast of Massachusetts, their developers say.
What's happening: Commonwealth Wind and Mayflower Wind are seeking at least a one-month delay to the planned projects, and to renegotiate their PPAs.
What they're saying: "An immediate suspension is crucial because, under the current PPAs, the Project is no longer viable and would not be able to move forward," Commonwealth said in its Oct. 20 filing, citing the war in Ukraine as among the disruptions hitting its supply chain.
- Mayflower echoed the statements in its filing a week later.
Of note: Commonwealth Wind is owned by Avangrid, based in Connecticut.
- The New Bedford Light, a nonprofit news site based in the growing offshore wind hub in Massachusetts, was first yesterday to report on the filings.
Context: This is supposed to be a triumphant moment for the offshore wind sector.
- After decades of delay, federal officials are rushing to lease parcels for development.
- The Biden administration this month announced the first such auction for wind energy projects off the Pacific Coast.
- And the Inflation Reduction Act signed this summer introduced lucrative incentives for clean energy development.
State of play: Instead, offshore wind, land-based wind and solar are getting rocked by supply chain disruptions, procurement challenges and volatile markets.
- The sectors depend on PPAs, which promise investors stable long-term returns — and energy customers stable prices. They're a frequent prerequisite for securing financing.
- Intensely volatile market conditions have made drawing up a PPA much more difficult.
The bottom line: Auctions and incentives only get you so far when they run up against the cold, hard reality of turbulent global markets.