Offshore Wind Makes Big Moves Across the Northeast Region
Two years ago, Acadia Center’s EnergyVision 2030 examined the energy mix needed to achieve the Northeast’s 2030 decarbonization goals and determined that at least 13% of the region’s electricity needs could be served by the development of 9.5 GW of offshore wind. In New England and New York, Acadia Center has advocated for ambitious state procurement goals and these states have recently made incredible progress. Over the last three years, Northeast states have raised their collective 2035 offshore wind goals from 1.6 GW to 14.6 GW, and they may exceed the EnergyVision 2030 target if several of the projects are completed before 2030. Together, the Northeast states’ ambitious targets for offshore wind development could generate enough electricity to satisfy a quarter of the region’s total electricity needs.
Although only one small offshore wind project is in operation today, states have begun to make real progress toward reaping the benefits of one of the world’s most bountiful clean energy resources – the abundant wind off of the Atlantic coast. States are finding that offshore wind is available, feasible, affordable, and it supports economic development, good jobs, and carbon reductions. The combined commitments from the Northeast states could produce as much as 60 TWhs of carbon-free electricity, reducing carbon emissions by about 29 million tons every year.
State comparison of current commitments, selection processes, completed procurements, and construction of offshore wind.
Connecticut
Since 2016, Acadia Center has been actively working with Connecticut to grow its commitment to offshore wind and, in 2018, Governor Malloy’s administration made its first two procurements totaling 300 MW. The first 200 MW project is predicted to support about 1400 jobs through both the addition of wind farm construction jobs and the jobs supported by increased spending in the local economy by those new workers. Following these two procurements, the state entered into a public-private partnership with the wind and marine services industries for a $93 million redevelopment of the New London state pier as a hub for regional offshore wind activities. With its long-standing maritime economy, New London has great potential to become one of the support centers for offshore wind build out in the region. In June 2019, Acadia Center and a coalition of clean energy advocates won a major victory when the state passed legislation requiring that the state issue solicitations for 2000 MW of offshore wind by 2030, or about 30% of the state’s electricity consumption. This commitment puts Connecticut at the front of the pack for northeastern states in terms of share of total electricity demand to be provided by offshore wind.
Massachusetts
In 2016, in response to efforts by Acadia Center and a coalition of clean energy advocates, Massachusetts passed legislation to secure its first 1600 MW of offshore wind by 2027. It has since selected an 800 MW project to be completed by 2021. The project is expected to reduce CO2 emissions by 1.6 million metric tons annually, equivalent to removing about 315,000 cars from the road, and deliver net benefits of $1.4 billion over the 20-year life of the contract. The contract demonstrated that the offshore wind industry can supply energy at costs competitive with fossil fuel generation over the long term. The developer also committed $15 million in investments to spur the offshore wind industry in Massachusetts. Governor Baker’s administration has issued a request for proposals for another 800 MW, with bids due in August 2019.
Acadia Center’s advocacy in 2018 helped secure passage of legislation authorizing an additional 1600 MW of offshore wind by 2035 pending a study to investigate the necessity, benefits, and cost of more offshore wind. In keeping with input from Acadia Center and other stakeholders, the May 2019 study supports increasing the state’s overall commitment to 3200 MW. These findings are bolstering the push for legislation to set the state’s overall offshore wind target at 6000 MW by 2035, which would be equivalent to nearly 50% of the electricity consumed by the state.
To support the construction of these large projects, the site of Massachusetts’ last coal plant will be converted to serve as a base providing support and logistics for the offshore wind industry, as well as transmission and battery support for turbines offshore.
New York
So far, New York leads the region in its total commitment to offshore wind capacity at 9000 MW, and it is making offshore wind a centerpiece of its plan to decarbonize the state’s electricity system. As a first step, the state issued a procurement in November 2018 of at least 800 MW. Leading up to its release, Acadia Center worked with allies to ensure that the procurement was structured to maximize consumer savings, support workforce development, and include environmental protections. The state is poised to announce its selection for a project up to 1200 MW.
New York’s offshore wind goal is a major building block of Governor Cuomo’s recently announced commitment to 100% emissions free electricity by 2040 and a net-zero carbon economy by 2050.
Rhode Island
Rhode Island led the region’s offshore wind efforts by hosting the first offshore wind project built in the United States: the 5-turbine, 30 MW Block Island Wind Farm, completed in late 2016. In May 2019 the state also approved a contract for 400 MW of offshore wind and is considering proposals for up to an additional 350 MW. The state is on track to reach the Governor Raimondo’s goal of 1000 MW sourced from clean, renewable energy by 2020.
Rhode Island has also been an early home to U.S. offshore wind industry headquarters for major companies, including Deepwater Wind (recently acquired by Ørsted) and GEV Wind Power. The presence of these new developers in the state demonstrate that a robust offshore wind industry can create not only clean power and cost savings, but good jobs and economic development opportunities.
Other Northeast States
Maine: Unlike its neighbors to the south, Maine’s coastal seabed drops off steeply right from shore, meaning that wind developers can’t use technology that attaches towers to the ocean floor in shallower depths. But that hasn’t stopped Maine from moving forward with offshore wind. Maine is looking to a much newer and experimental technology using floating platforms. Governor Mills recently signed a law recommitting Maine to a project consisting of two 6-MW turbines on floating platforms.
In another important step signaling Maine’s strong commitment to offshore wind (and other clean energy innovations), Governor Mills has created the Maine Offshore Wind Initiative and joined Massachusetts and New Hampshire to participate in the Gulf of Maine Intergovernmental Regional Task Force on Offshore Wind. As the costs of floating platform-based offshore wind come down, Maine’s opportunities to make larger commitments to offshore wind will continue to grow.
New Hampshire: Until recently, New Hampshire was on the sidelines in the offshore wind development race. But, in January 2019, Governor Sununu formally requested that federal regulators establish a state-federal offshore wind Task Force that will follow a multi-year process that 15 other states have already initiated. Without this process, New Hampshire would only be able to develop offshore wind projects within three miles of the coast — the point at which state waters end and federal waters begin. In April, regulators established a regional Gulf of Maine task force to coordinate activities in Maine, Massachusetts, and New Hampshire.
What does this mean for people in the Northeast?
These massive commitments by the Northeast states along with others along the eastern seaboard will allow for this new, burgeoning industry to develop and offer opportunities for states to roll out their offshore procurements and construction in a coordinated way. Based on performance shown to this point, costs will continue to decline as the industry grows. For example, turbines are getting larger, producing more electricity and resulting in lower and lower prices per megawatt-hour.
Each state making these commitments will vie for the economic development and employment benefits that the offshore wind industry buildout promises, breathing new life into the numerous deep-water ports up and down the coast. Many of the region’s port communities have struggled through the decline of the industries that formerly drove their economies, but they are now poised to reap the benefits offshore wind can bring.
The buildout of offshore wind resources will also contribute significantly to the urgent push to decarbonize the way we generate electricity and power our buildings, industries and transportation systems. The destructive and dangerous impacts of the changing climate are upon us, and they disproportionately affect coastal communities and fisheries through sea-level rise and warming waters. Replacing old, dirty fossil fueled generation with offshore wind is an important step toward an electric grid that will support the clean electrification of our buildings and transportation sector.
In addition to reducing carbon emissions, offshore wind will reduce other harmful emissions related to burning fossil fuels. These emissions damage people’s lungs and hearts and take a serious economic toll on affected communities. Reducing such emissions has significant human health benefits especially for those living in economically disadvantaged communities where fossil-fueled plants are concentrated.
In the Northeast, offshore wind is poised to meet the region’s needs as older generating plants are retiring because of economic pressures, environmental standards, and aging equipment. Grid operators, market participants, and advocates like Acadia Center are looking for ways to shift how the grid operates as more and more renewable energy resources like offshore wind begin to produce electricity. Replacing some of these older retiring plants with offshore wind will bring other benefits in the form of lower wholesale electricity prices – reflected in the significant economic benefits realized in the MA and RI contracts. In addition, because offshore wind may deliver energy during peak winter conditions when dirty gas and oil-powered plants are currently paid to run, these new facilities will further bring down the price – and pollutants – from electricity generation.
Challenges
As offshore wind grows, the region will also face a range of challenges. Economically, the industry has benefited from the federal Investment Tax Credit, which is due to expire at the end of 2019. If allowed to expire, projects that go under contract after the end of this year may face up to 12% higher costs. Further, the construction and operation of many thousands of wind turbines and the needed transmission cables must appropriately address impacts on whales and other endangered species, birds, and a fishing industry already under significant pressure as a result of warming waters and overfishing. Advocates and decisionmakers must engage with local communities to address concerns around siting the landfall cables and other local impacts.
On the economic side, states and stakeholders should consider coordinating procurements to achieve an orderly build out of projects, allowing the industry to ramp up the supply chain and train a work force. States should look closely at whether each project should be connected to the shore individually or whether a central transmission back bone makes more economic and environmental sense.
What’s next?
Offshore wind is on a track to succeed in the Northeast, given the surge of state interest. However, the future success of this resource depends on its implementation, which must be accomplished on an aggressive schedule in order to reap the economic and environmental benefits. The projects must also proceed in ways that set a good precedent for the U.S. industry. Project selection, siting, and transmission must all be considered with an eye toward meeting fast-approaching climate deadlines and ensuring that labor, environmental, and economic justice issues are central to planning. Acadia Center will continue to work closely with the states, advocates, and other stakeholders on these issues, bringing its independent analytic, advocacy, and coalition-building expertise to ensure the successful deployment and continued expansion of offshore wind in the region.
Additional Resources
Press Release: CT House of Representatives Passes Pivotal Bill to Build 2000 MW of New Offshore Wind by 2030
Blog: A Regional Affair: Offshore Wind in Massachusetts Clears Hurdle in Rhode Island