In a filing, the wind developer told the Department of Public Utilities (DPU) that “there does not appear to be a viable path that would allow the project to move forward under the PPAs….. the PPAs [are] uneconomic and insufficient to support financing.”
But Avangrid is not abandoning the project. The company says that if the DPU dismisses the PPAs, it will seek to bid the project again in a Massachusetts offshore wind procurement in April – this time with more viable terms.
In November, Avangrid asked the DPU to let it continue negotiating the PPAs but the utilities declined to reopen talks.
Avangrid cited economic conditions that have made the PPAs untenable. In the company’s latest filing, on December 16, it said the “prolonged war in Ukraine has unsettled markets and increased costs for many products, inflation has been persistent, interest rates have increased in a manner unprecedented in recent times, commodity prices have risen sharply, and supply shortages and supply-chain constraints once thought to be temporary remain pervasive.”
The company, a subsidiary of Spanish firm Iberdrola Group, concluded: “Simply put, it is now far more expensive to construct the project than could have been reasonably foreseen even earlier this year.”
A spokesman for Eversource said: “The three Massachusetts electric utilities selected these projects through a competitive process and negotiated these contracts in good faith with the offshore wind developers and various state agencies in accordance with all applicable laws and regulations. We remain ready to move forward with the contracts as filed.”
Commonwealth Wind is the largest project in the state’s pipeline. A state law requires Massachusetts to procure 5.6GW offshore wind by mid-2027.