United States

United States

Massachusetts to double offshore requirement to 3.2GW

Massachusetts utilities will be ordered to purchase an additional 1.6GW of offshore wind, following a previous mandate for 1.6GW.

Massachusetts State House (pic: Pixabay)
Massachusetts State House (pic: Pixabay)

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The state's Department of Energy Resources (DOER) made the recommendation, which automatically becomes law, in a new report. 

"DOER recommends and will require the Massachusetts electric distribution companies to proceed with an additional 1,600MW of offshore wind generation solicitations," DOER commissioner Judith Judson wrote in an accompanying letter.

"An additional solicitation of 1,600MW will likely provide benefits for Massachusetts rate-payers in excess of the anticipated costs of the contracts," she said.

DOER suggested soliciting the first 800MW in 2022 and the remaining 800MW in 2024. A third solicitation — if needed — would be held in 2026 if 1.6GW has not already been procured.

The report projected the purchases could save Massachusetts consumers between $670 million and $1.27 billion over 20 years compared with buying the same amount of clean energy wholesale — as long as the levelised cost is within 10% of $71-75/MWh.

The DOER's directive follows a 2018 law directing the agency to study an additional 1.6GW in offshore wind.

By law, the state must slash its climate emissions to 25% below 1990 levels by 2020 and 80% by 2050.

In 2016, Massachusetts had already ordered utilities to purchase 1.6GW of offshore wind in two solicitations, as long as the second tranche is at a lower price than the first. It was the largest procurement of offshore wind by a US state.

Massachusetts subsequently approved 800MW from the Vineyard Wind project, co-owned by Copenhagen Infrastructure Partners and Avangrid, at $65/MWh, which is competitive with European prices.

DOER issued a request for proposals for the second 800MW of offshore wind on 24 May, with winners revealed by 8 November and contracts negotiated and signed by 13 December.

Energy storage and green finance

In a study into the necessity, benefits and costs of the technology, the department also recommended considering a separate tender for energy storage capacity to be run alongside the offshore wind auctions.

It found that the addition of energy storage may increase the overall benefits of a project, but would also be likely to increase costs.

Therefore, "completing an energy storage solicitation separately and in addition to the offshore wind solicitation may identify cost-effective creative energy storage solutions that maximise benefits", the DOER stated.

The DOER should also consider the benefits of an energy storage solicitation along with continuing to allow paired storage in the additional offshore wind solicitation, it concluded.

Massachusetts should continue to evaluate ways to cost-effectively finance clean energy, reduce risk to ratepayers and improve the procurement process, the DOER recommended.

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