Tri-state offshore wind pact nets four bidders for Rhode Island. But at what cost?

Four choices is better than none.

Which is good news for Rhode Island as it attempts to grow its renewable energy portfolio and cement its foothold in the burgeoning offshore wind industry.

A solicitation to buy up to 1,200 megawatts of offshore wind power drew four proposals by Wednesday’s noon deadline, Rhode Island Energy announced.

The latest request for proposals followed the failed solicitation issued in March 2023 that had only one response, which was ultimately deemed too expensive to meet state requirements. 

And while wind developers have lamented rising project expenses, suggesting they need more money from the utility companies that buy their power, Rhode Island regulators are aiming to cut costs by buying in bulk with Massachusetts and Connecticut.

A first-of-its-kind agreement between the three states inked last October coordinated their separate solicitations and encouraged developers to build larger projects. Splitting the power across two or three states would make the company’s investments more cost-effective, and result in more affordable prices for ratepayers who pay for the power the projects generate.

The combined 6,800 megawatts up for auction across all three southern New England states could come from one project, shared across all three jurisdictions, or with multiple projects satisfying each state’s individual needs. Preference will be given to projects that power two or three states, though single-state projects are also allowed. And each state will evaluate its submissions independently based on cost-benefit analysis and economic development, among other criteria.

“This is an exciting day to be receiving project proposals from multiple offshore wind companies — including multi-state project proposals with Massachusetts and Connecticut, and individual project proposals specific to Rhode Island,” Acting State Energy Commissioner Chris Kearns said in a statement Wednesday. 

“We look forward to reviewing the proposals with Rhode Island Energy along with Massachusetts and Connecticut State Energy Offices over the next few months with the potential of advancing new offshore wind projects that balance climate change, environmental, ratepayer and economic development interests.”

The solicitation requires proposals shared across two or three states to offer the same power price in each. But there’s no agreement for all states to pay the same price if the project powers only one of them.

Which sounds like it could set the stage for a bidding war.

That’s unlikely, said Patrick Crowley, a labor organizer and co-chair of Climate Jobs Rhode Island. 

Even if a developer only needs one state to buy its power, neighboring states also provide key ports, workers and connection points, which may require additional approval by regulatory agencies in those jurisdictions. 

“If they antagonize one state by giving another state a better price, that’s going to make it less favorable from a regulatory standpoint during the review,” Crowley said. “It’s not in their interest to do that.”

Kearns declined to comment on the hypothetical bidding competition, saying Wednesday afternoon it was too early to make those evaluations.

Wednesday afternoon it was too early to make those evaluations.

The structure of the memorandum between the three states offers collaboration but also sovereignty, meaning it’s on the states to choose to collaborate rather than compete,  Larry Chretien, executive director for Green Energy Consumers Alliance, Inc., said in an interview Wednesday.

“If all three states go in, there will be work up and down the coast that creates something like you see in Europe where it creates a whole supply chain, a new sector,” Chretien said. “I’d make the pitch, if they had me in the room, ‘why not go in on this together?”

Crowley saw only benefits to the tri-state pact, especially since it resulted in more choices for Rhode Island than when it attempted to go it alone.

“We think it’s going to put cost pressure on the downward side,” Crowley said. “It just gives more options, which creates an easier process for states to get to a place to say, ‘yes.’”

Bids not made public 

Rhode Island Energy named the four companies that submitted bids Wednesday, but declined to share the full proposals, including the price each developer wants for its electricity, have not been made public. 

However, the companies have separately shared some details of their submissions, touting the benefits of their projects in helping meet electricity needs and renewable energy mandates, along with economic benefits.

The 1,184-megawatt Starboard Wind project proposed by Danish wind giant Orsted provides enough power for 600,000 homes in Rhode Island and Connecticut, the two states where the proposal was submitted. The project is expected to be operational by the early 2030s, Meaghan Wims, a spokesperson for Orsted, said in an email Wednesday.

As proposed, either state could buy the entire project, or split power between the two, as is the case with the 700-megawatt Revolution Wind Farm developed by Orsted and Eversource Energy in the same lease area off the Block Island coast. Construction on the Revolution Wind Farm has already begun, and will provide 400 megawatts of wind-powered electricity to Rhode Island once finished.

The two projects combined would satisfy up to 75% of Rhode Island’s electricity needs while helping meet mandated benchmarks in decarbonization, the company said in a statement Wednesday.

The project would also bring $1.1 billion in direct, economic investment and 3,800 full-time jobs to the state, the company said.

Orsted, which submitted a smaller wind farm in concert with Eversource in response to Rhode Island’s solicitation last year, touted the affordability of its latest project, creating nearly double the return on investment through jobs, energy-system reliability and environmental benefits, according to the company. 

“The project will power the state toward its clean energy goals while driving job creation, community benefits and investments into the state’s ports and infrastructure,” David Hardy, group executive vice president and CEO of Americas at Orsted, said in a statement. 

The second proposal, Vineyard Wind 2, comes from the same developer of the aptly named Vineyard Wind 1 project, the first-in-the-nation utility-scale wind farm, which began producing power off Martha’s Vineyard in January. Vineyard Offshore, which is owned equally by Copenhagen Infrastructure Partners (CIP) and Avangrid Renewables, LLC, aims to “build on the successes” of its original wind farm with a second, 1,200-megawatt wind farm, providing power for up to 650,000 homes by 2031, the company said in a statement on Wednesday.

The proposal was submitted to all three states, individually and jointly, offering the options for power sharing among all three, two or just one. The project is expected to generate $2.3 billion in direct expenditures, and 3,800 job-years across New England, including $1.5 billion in Massachusetts alone, the company stated.

Avangrid Renewables also submitted a separate proposal that would provide a combined 1,871 megawatts of power, according to a statement from the company.

The proposal submitted individually and jointly across the three states, offers the choice between the single, 800-megawatt New England Wind 1, or with the add-on of the 1,080-megawatt New England Wind 2. The pair of wind farms comes after the developer pulled out of its agreements in Connecticut and Massachusetts for projects known as Park City and Commonwealth Wind, citing higher project costs that made the existing agreements no longer financially viable.

New England Wind 1 replaces the now-canceled Park City Wind project, in the same lease area south of Cape Cod. The 800-megawatt project would provide enough power for 400,000 homes, creating 4,400 full-time jobs and $3 million in direct economic investment, the company stated.

Adding another 1,080 megawatts of wind through New England Wind 2 more than doubles the economic impact, to 9,200 jobs and $8 billion in direct investment, the company stated.

‘Pivotal moment’

The fourth and final project by SouthCoast Wind Energy also seeks to replace the now-canceled agreements with Massachusetts power companies for a 1,200-megawatt wind farm. 

The Wednesday announcement contained only a quote from SouthCoast Wind CEO Michael Brown confirming a bid was submitted.

“Today marks a pivotal moment for the SouthCoast Wind project and the offshore wind industry in New England,” Brown said. “The first ever tri-state offshore wind solicitation demonstrates an unshakeable commitment to a clean energy future for all and we are proud to submit our bid. After years of extraordinary work by our team, the SouthCoast Wind project is on schedule to deliver abundant and renewable power to New England’s electric grid by 2030.”

In an emailed statement on Wednesday afternoon, company spokesperson Rebecca Ullman said the proposal called for a 1,200 megawatt project, and was submitted to all three states.

Any of the four projects, if purchased entirely by Rhode Island, would fulfill the state’s 1,200-megawatt cap under its solicitation. Massachusetts, meanwhile, is seeking up to 3,600 megawatts while Connecticut looks to buy 2,000 megawatts.

Rhode Island Energy, which administered the bid on behalf of the state, is scheduled to begin to review proposals with the Rhode Island Office of Energy Resources and Division of Public Utilities and Carriers on April 3, with a conditional selection by Aug. 7, and a contract executed in October, according to the online schedule. 

Massachusetts has a similar timeline for review and selection of proposals, according to the website jointly overseen by its state energy resources department and electric distribution companies. While Rhode Island Energy has not published the proposals received as of Wednesday, Massachusetts has made all three of its solicitations public online, with many redactions.

Connecticut’s public bid list and schedule were not available.