The joint venture between offshore wind specialists Ocean Winds and oil giant Shell has agreed to pay a $60 million fine to terminate the PPAs, which were signed with Massachusetts utility National Grid, Boston-based energy company Eversource, and New Hampshire utility Unitil.
In 2022 SouthCoast Wind signed PPAs with the companies as part of its development of the 1.2GW SouthCoast Wind 1 offshore wind project (formerly Mayflower Wind).
The decision, which needs approval from the Massachusetts state Department of Public Utilities (DPU), follows a similar decision to cancel PPAs by Iberdrola’s US subsidiary, Avangrid. In July, the company agreed to pay a fine of $48 million to three companies — including National Grid and Eversource — it had agreed PPAs with for the 1.2GW Commonwealth Wind project planned off the Atlantic coast of Massachesetts.
SouthCoast Wind is now expected to pay a fine for reneging on its PPA deals with the three utilities, pending DPU approval.
The joint venture previously signalled its intention to exit the PPAs amid a worsening economic situation.
SouthCoast Wind alluded to the wider issues now buffeting global offshore wind development, which include supply chain pressures in the wake of the Covid-19 pandemic, soaring costs and a turbulent geopolitical climate in Europe.
“Closing these contracts was never the plan but impacts of covid-related supply chain disruptions and the war in Ukraine made them unfinanceable,” a spokesperson for the joint venture told Windpower Monthly.
They added that the joint venture still planned to pursue offshore wind opportunities in New England and had budgeted $100 million for 2023 despite moving to cancel the PPAs.