Should Mass. go big or small with upcoming offshore wind procurement?
by Bruce Mohl, CommonWealth Beacon [reprinted with permission]
July 22, 2024
THE BIG QUESTION heading into next month’s offshore wind procurement is whether Massachusetts, Connecticut, and Rhode Island should go big or go small.
Attorney General Andrea Campbell’s office early on in the procurement process urged going small. Her argument was that prices for offshore wind electricity are likely to be high now because of supply chain backlogs, steep interest rates, and inflationary pressures. Her suggestion? Purchase a relatively small amount of offshore wind power now and put off larger procurements until the market stabilizes and prices come down.
Alicia Barton, who heads Vineyard Offshore, one of the bidders in the procurement, urged the state to go big in an interview on The Codcast, Barton acknowledged supply chain concerns and ongoing economic uncertainty, but said the economics of offshore wind are unlikely to change any time soon and climate change dictates acting now and going big.
“I don't see [how] those supply chain and those macroeconomic forces are going to suddenly look very different a year or two years from now,” she said. “And so, when you take those timelines into consideration and you match them up against the climate and clean energy goals, and then add on top both the economic and energy benefits that we see from the projects, I think there’s every reason to keep advancing toward that long-term vision of an electric grid in New England that is substantially powered by offshore wind. And getting a jump on that now is going to put us in the best position to be where we want to be in 2030, 2035, and 2040.”
The interview with Barton was recorded prior to a blade incident at Vineyard Wind 1, which halted construction at the wind farm and left foam and fiberglass washing up on Nantucket. The incident has cast a pall on the emerging offshore wind industry.
Vineyard Offshore’s chief financial backer owns half of the 806-megawatt Vineyard Wind 1 and Vineyard Offshore is now seeking contracts to build Vineyard Wind 2, a 1,200-mgawatt wind farm that is in the very early stages of development and, if selected, wouldn’t be up and running until 2031.
CommonWealth Beacon · Vineyard Offshore CEO: Time to go big
The possibility of Donald Trump winning the White House again looms large for Vineyard Offshore and the rest of the offshore wind industry. Trump delayed the development of offshore wind in his first term and has pledged to sign an executive order shutting down the industry on his first day in office if re-elected.
“There is a lot of uncertainty about what Donald Trump means when he makes some of those statements,” Barton said. “There's also, I think, a fair question what the details of that are, whether he would follow through and certainly we don't know who is going to win the election in November. All of that does create uncertainty that we are feeling in the industry right now. No two ways about that.”
But Barton wonders whether Trump would really try to pull the plug on an industry that has grown considerably since the former president was last in office. Barton said offshore wind was just a concept in 2016 when the Massachusetts Legislature approved the state’s first significant offshore wind procurement legislation. Now, she said, the industry is up and running, and jobs and investment are picking up.
“I think the calculus is different for any new federal administration to look at how they will treat the industry and its prospects for delivering economic and energy benefits to the country,” Barton said. “I'm not trying to totally minimize what Donald Trump has said or that he could pose risks to the industry of a slowdown. I am worried about that, and I do think it's something that, again, we should be worried about in New England and other states that have offshore wind goals. But we are in a very different place, where cutting back on offshore wind really is going to be ratcheting down on an economic engine that has now started in a very real and powerful way. And I think that's just going to look a bit different in my opinion than it did the last time around.”
Barton also said the offshore wind industry’s supply chain challenges are not going to go away any time soon. She said countries across the world are pursuing offshore wind and equipment and vessels to support the industry are in short supply.
“When you see high voltage electrical equipment, certain specialized installation vessels, there aren't enough to go around,” she said. “I do think that, however, the supply chain will respond to the market signals that show that there is just an increasing amount of demand for offshore wind globally. So I think that will send global supply chain investment signals. What it means for us in the US though, is we have to admit we're still an earlier stage market and in some ways a riskier market for some of these suppliers.”
She also said building a local supply chain for the offshore wind industry hasn’t take off as quickly as everyone hoped. “That is, I think, still a correct vision for the industry,” she said. “But we have found that it's been challenging. We haven't necessarily seen all of the projects, the supply chain projects that have been proposed in the US, moving forward.”.
Like other developers, Vineyard Offshore is showcasing the economic development potential for offshore wind with its Vineyard Wind 2 proposal. If it wins a contract, Vineyard Offshore says it will partner with Sublime of Somerville, a developer of low carbon cement, and Veir of Woburn, which is developing technology to reduce transmission losses in electrical infrastructure.
“Governor Healey's made clear that she has a vision to make Massachusetts the national leader in climate tech, and she's proposed a billion dollar funding initiative that the Legislature is actively debating and that we're very optimistic we'll pass,” Barton said. “Tying that to the Commonwealth's nation-leading offshore wind goals makes all the sense in the world in our opinion, and that's why we're excited to be advancing these kind of partnerships.”
This article first appeared on CommonWealth Beacon and is republished here under a Creative Commons license.