Connecticut to offer inflation protection in forthcoming wind tender

Connecticut has announced plans for an offshore wind tender that will include measures to protect potential bidders against inflation. 

Paddle boarders near Madison, CT. (pic credit: Tim Clayton/Corbis via Getty Images)

Connecticut's Department of Energy and Environmental Protection (Deep) said it was releasing two requests for proposals (RFPs) to build grid-scale renewables projects in Connecticut’s territory, including an offshore wind project. Both RFPs have a deadline of 31 January, 2024. 

The Deep said the offshore wind tender would consider bids for up to 2GW of offshore wind capacity and would align with efforts in Massachusetts and Rhode Island to procure up to 6.8GW of offshore wind between all three states by 2024. 

Inflation mechanism

The Deep also said that the offshore wind tender that would allow bidders to submit pricing proposals at either a fixed rate, or a rate indexed to the price of macroeconomic factors like inflation with an up or down margin of 15%. 

The move follows regulators in neighbouring New York state rejecting requests from offshore wind developers - including Danish energy firm Ørsted, and oil companies BP and Equinor - to charge customers more for the energy from their planned wind farms because of soaring costs. 

New York recently awarded conditional contracts to three offshore wind proposals submitted by energy majors, including French oil company Total, German utility RWE and Danish renewable investment major Copenhagen Infrastructure Partners (CIP). 

Connecticut is hosting the development of two offshore wind projects — the 704MW Revolution Wind and the 804MW Park City Wind. 

In addition to offshore wind, Deep said the second RFP will consider “zero carbon electricity generating resources, which include solar, onshore wind, energy storage paired and co-located with a zero carbon resource, zero carbon fuel cells, geothermal, energy efficiency, and run-of-river hydropower".