Latest blow to Shell-Ocean Winds US plan as state says 'we don't review hypothetical projects'
Rhode Island's refusal to issue critical cable approval for the beleaguered offshore wind development criticised by industry advocacy group for derailing regional goals
Shell-Ocean Winds' struggling SouthCoast faced another disappointment after Rhode Island decided to pause the review of a critical cable link for the Massachusetts-bound offshore wind project.
Rhode Island Energy Facilities Siting Board (EFSB) last month said as the developer is trying to withdraw the project's power purchase agreements (PPAs), EFSB cannot consider state permits for the cable route.
The project's export cable would need to cross Rhode Island state waters on its way from the lease area to its point of interconnection in Falmouth, Massachusetts.
“Stated simply, if there’s no wind farm financed and constructed, there’s no need for the transmission facility.”
SouthCoast confirmed it is appealing the decision.
Industry advocacy group American Clean Power Association (ACP) criticised the decision by the Rhode Island regulator as setting a concerning precedent that will impede the region “from reaching ambitious clean energy goals”.
“Siting and permitting, as well as power sales, are necessary ingredients in moving projects forward. They must run in parallel, not have one wait for the other,” said Josh Kaplowitz, ACP vice president of offshore wind.
The association requested the state “reconsider this decision and put Rhode Island and New England back on course toward achieving offshore wind goals.”
“We are well-advanced in permitting at both the federal and state levels,” she added, noting that the Massachusetts facility siting board hearings recently concluded and the Bureau of Ocean Energy Management, lead regulator of energy development in federal waters, expects to issue its environmental impact statement (EIS) later this year.
The EIS sets the stage for issuance of the record of decision (ROD) that would enable the project to head into construction.
Emblems of struggle
SouthCoast, formerly known as Mayflower Wind, and the 1.2GW Commonwealth project have become emblems of the industry’s struggle in the face of deteriorating economics, as they are so far the only two to have actually been withdrawn from power deals.
SouthCoast faces $60m in cancellation fees from Massachusetts while Commonwealth may see nearly $49m in fines.
Ullman confirmed that the project will be resubmitted into the Massachusetts round 4 solicitation early next year.
“We have budgeted $100m this year alone to advance our offshore wind project and remain committed to delivering its clean energy to the New England grid by the end of this decade,” said Ullman.
Multiple other projects in the US are also in financial trouble and seeking offtake contract renegotiation, including nearly all of New York’s 4.3GW of contracted capacity.
The US Inflation Reduction Act offers 30% investment tax credits for offshore wind development that can be sweetened to over 40% with adders.