Dive Brief:

• Massachusetts regulators on April 16 approved Vineyard Wind's 20-year contracts with the state's electric distributors for 800 MW of offshore wind.
• The Department of Public Utilities (DPU) deemed that the contracts, averaging 8.9 cents/kWh between the two separate phases of the project, are cost-effective and in the public interest. Vineyard Wind also committed to provide $15 million over 15 years to help integrate battery storage in low-income communities.
• National Grid, Eversource and Unitil have already kicked off a new offshore wind solicitation, submitting in March their second request for proposals (RFP) for up to 800 MW of the renewable resource.

Dive Insight:

Developers responding to the second RFP will need to beat the low bid from Vineyard Wind in the first round, under current state law — $64.97/MWh or a levelized nominal price of $84.23/MWh.

The price cap based on the previous low bid was established to promote growth in the nascent industry and to ensure future price decrease. Proponents of the cap see it as an important ratepayer protection.

However, some legislators view the cap as potentially prohibitive for commitments by companies to invest in offshore wind for the state. Rep. Patricia Haddad, D, proposed a bill, H.2867, to change the price cap measure and filed a similar amendment to the state budget bill, currently being considered.

"Right now, the investment and the jobs are paramount," Haddad told Energy News Network. Her district, in the southeast, stands to benefit from the growth of the offshore wind industry.

The focus on investments from developers follows large commitments to invest in industry research in a neighboring state. Rhode Island's Deepwater Wind project, bought by European offshore wind developer Oersted, pledged $4.5 million on Monday to develop the offshore wind industry in the state. The developer is working on a 400 MW offshore wind farm, Revolution Wind, and its investment is based on permits being approved for the project.

The Massachusetts Department of Energy Resources filed a letter the day after utilities filed their second RFP proposal, supporting the inclusion of energy storage in potential bids as well as RFP changes that seek to lower the costs of financing and bid prices.

"The recent filing... is a reflection of stakeholder engagement to provide flexibility to bidders, maximize competition, encourage economic development and energy storage, and ensure the greatest benefit for ratepayers," Katie Gronendyke, spokesperson for the state's Executive Office of Energy and Environmental Affairs, told Utility Dive via email.

Vineyard Wind's contribution would further the state's goal to develop 200 MWh of energy storage by 2020 across Massachuetts, pairing well with other plans to push communities to consider renewable energy integration. House Speaker Robert De Leo, D, introduced a $1 billion proposal in February to pay for solar power, energy storage and electric vehicle charging infrastructure over the next decade.