Connecticut’s first offshore wind bidding war applauded
A fishing vessel travels Dec. 20, 2016, in Block Island Sound, with a 6-megawatt wind turbine generator, comprising the first offshore wind farm in the United States, the 30 megawatt, five-turbine Block Island Wind Farm by Deepwater Wind, in the background. Environmentalists and offshore wind companies are applauding Connecticut's first bidding war devoted to offshore wind. The request for proposals includes stipulations to protect marine wildlife and the fishing industry.
Hartford — Environmental and labor leaders, along with competing international and American energy companies, say they are excited for the state's first bidding war dedicated to offshore wind power.
Announced on Monday, the Department of Energy and Environmental Protection's request for proposals seeks offers of up to 2,000 megawatts of electricity from offshore wind farms and calls on developers to meet a host of benchmarks when it comes to planning, labor and minimizing potential impacts to wildlife and the commercial fishing industry.
The request for proposals comes as the state is already slated to receive 300 megawatts from Ørsted-Eversource's Revolution Wind farm in federal waters south of Martha's Vineyard by 2023, and after lawmakers and environmental groups successfully pushed this spring for a bigger offshore wind procurement by 2030. The bids are due on Sept. 30.
"It's terrific to have this out and have it up to 2,000 megawatts," said John Humphries, executive director of the Connecticut Roundtable on Climate and Jobs. "It moves the industry forward here in Connecticut, and the fact that we've got strong labor and environmental provisions really sets a standard for the industry nationwide."
DEEP said Monday that it had received more than 50 comments on its mid-July draft request for proposals, followed by 100 comments and emails to DEEP's Commission on Environmental Standards, producing multiple changes enhancing the final requirements for bidders.
"Offshore wind has the potential to significantly reduce the electric grid's dependence on fossil fuels, improve grid reliability in the winter, and advance clean energy jobs ... all while helping Connecticut achieve critical climate goals," DEEP Commissioner Katie Dykes said in a statement.
Developers' bids must contain an "environmental and fisheries mitigation plan," including coordination with stakeholders, pre-construction and risk assessment plans, reporting schedules, mitigating risks to fisheries, marine mammals, sea turtles, and birds and bats.
Noise from construction equipment and shipping potentially could disturb whales and other species, making them go into deeper waters or change their movement patterns. But several scientists and the Bureau of Ocean Energy Management say offshore wind has not harmed marine life, and note that projects' mitigation plans will include seasonal restrictions to protect marine life.
Charles Rothenberger, climate and energy attorney for Connecticut Fund for the Environment/Save the Sound, called offshore wind, "if reasonably sited and operated," an "exciting new opportunity for Connecticut's energy future."
"On balance, the environmental and fisheries mitigation recommendations were well done and relatively comprehensive," he said. "However, we will be watching closely how DEEP utilizes and enforces those recommendations."
Rothenberger said it was disappointing the final request for proposals did not require developers to establish an "environmental mitigation fund" to offset potential environmental and commercial impacts. But it did mention it would consider such funds "a qualitative measure for assessing the relative strength of proposals ... we are hopeful that proposals will include this element in order to be more competitive in the selection process," he said.
The request for proposals says bidders must not pay less than the prevailing wage for laborers, workmen and mechanics, and must "engage in a good faith negotiation of a project labor agreement." It also requires bidders to follow decommission plans outlined by Bureau of Ocean Energy Management.
Bidders must submit at least one bid for 400 megawatts, but DEEP encouraged them "to provide multiple bids with sizing options greater than and less than 400 megawatts to provide the selection team" with greater options.
'Very necessary project'
In the comments leading up to the final request for proposals, multiple offshore wind developers argued DEEP's draft request for proposals and the Commission on Environmental Standards' recommendations were duplicative of federal permitting requirements and would add significant costs. The commercial fishing industry, meanwhile, suggested a host of plans and data collection, and urged developers to provide exact numbers and locations of proposed turbines, "a commitment to avoid locating turbines in areas near sensitive fish habitats" and plans to coordinate with the industry to minimize interference with fishing gear.
According to DEEP, the request for proposals also "aligns with a similar offshore wind solicitation run by the Massachusetts Department of Energy Resources, enhancing competition and urgency as the Production Tax Credit that benefits wind production sunsets at the end of the year."
Offshore wind companies, including Ørsted-Eversource and Vineyard Wind, a joint venture between Copenhagen Infrastructure Partners and Avangrid Renewables, expressed enthusiasm about Connecticut's push toward wind energy.
"The opportunities for offshore wind to transform Connecticut's energy economy are immense, and Ørsted and Eversource commend the state for its aggressive offshore procurement goals," Ørsted and Eversource said in a statement Thursday. "While we don't comment on active bids, we are excited to bring our Revolution Wind project to Connecticut, which will deliver significant economic development opportunities and help the state achieve its clean energy goals."
Ørsted and Eversource are negotiating with state officials and the Connecticut Port Authority to finalize a $93 million public-private investment into New London State Pier to assist with offshore wind development. Recent leadership shakeups at the port authority have not impacted negotiations, the companies and port officials said recently.
Erich Stephens, chief development officer of Vineyard Wind — which previously proposed to help establish an offshore wind hub in Bridgeport — said, "We're excited by the RFP and look forward to submitting a bid that positions Connecticut to be a real leader in offshore wind, an industry that has the potential to benefit ratepayers and create jobs for generations to come."
State Sen. Paul Formica, R-East Lyme, said the Commission on Environmental Standards helped pave the way for better protections for the maritime, commercial fishing and aquatic industries.
"The fishing industry is right to be concerned and we want to make sure we're doing the right thing to protect the grounds and mitigate impacts," Formica, whose family owns Flanders Fish Market in East Lyme, said Thursday.
Formica and other lawmakers long pushed for market changes designed to help keep Millstone Power Station operational while also calling on larger procurements of offshore wind.
"The first step was securing the base load to give us the opportunity to do more renewables," Formica said, calling offshore wind a "very necessary project in terms of energy generation and as we make it into the next decade, the economy and jobs, not only for New London but for all of Connecticut."
Offshore wind prices have dropped significantly since Deepwater Wind built the Block Island Wind Farm, which delivered power at 24 cents per kilowatt hour in its first year of operation with a 3.5 percent annual escalator built into the contract. Ørsted bought Deepwater Wind last year for about $500 million.
Vineyard Wind's 800-megawatt offshore project — recently hit with delays after the federal government called for further environmental review — will sell power to three Massachusetts utilities at a fixed rate of 8.4 cents per kilowatt hour, according to EcoRI News. In Rhode Island, which will receive 400 megawatts from Revolution Wind, National Grid will pay 9.84 cents per kilowatt hour for 20 years.
State-regulated utilities Eversource and United Illuminating will buy electricity produced at Revolution Wind and deliver it to Connecticut consumers, but the proposed price per kilowatt hour — which is fixed, unlike the Block Island Wind Farm — remains undisclosed while under review by the Public Utilities Regulatory Authority.