Dive Brief:
- The Massachusetts Department of Energy Resources (DOER) published on Friday a report recommending additional procurement of up to 1.6 GW of offshore wind.
- The report advocates for a solicitation in 2020 to construct a transmission line to serve new wind farms. Building an independent transmission line will minimize environmental impacts compared to multiple lines being built by each developer, according to the report.
- The agency will require the state's electric distribution companies to proceed with offshore wind generation solicitations. DOER recommended the solicitations to take place in 2022, 2024 and, if necessary, 2026, in order to maintain developer confidence in market demand.
Dive Insight:
The report calls for doubling Massachusetts' current goal of 1.6 GW of offshore wind.
State regulators approved 20-year contracts for 800 MW of offshore generation from Vineyard Wind, this spring. National Grid, Eversource and Unitil have already kicked off a new offshore wind solicitation in March, issuing their second request for proposals for up to 800 MW.
Developers responding to the second RFP will need to beat the current bid from Vineyard Wind of $64.97/MWh or a levelized nominal price of $84.23/MWh, according to state law. Some legislators view the cap as potentially prohibitive and are seeking to change the measure, although proponents of the cap have deemed it necessary to ensure future price decreases.
"To protect ratepayers, any future solicitations should maintain a price cap" similar to the one currently in place, the DOER report concluded. However, the report noted that the current price point will make it challenging for proposals to compete if they pair offshore wind with energy storage, despite the greater flexibility for reducing costs and emissions during peak times.
Despite intentions to double procurement, Massachusetts will not have the most ambitious offshore wind targets. New Jersey announced plans last fall to develop 3.5 GW of offshore wind by 2030.
