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Shell and EDPR Win Massachusetts’ Second Offshore Wind Tender

Shell and EDPR Win Massachusetts’ Second Offshore Wind Tender


Mayflower Wind joint venture’s 804-megawatt project will sell power at a lower price than Vineyard Wind’s landmark development.

Shell has its first concrete offshore wind project in U.S. waters.

Massachusetts on Wednesday selected an 804-megawatt project backed by Mayflower Wind, a joint venture of Shell and EDP Renewables, as the winner of its second offshore wind procurement.

The announcement brings another major project into focus in the rapidly evolving U.S. market. Mayflower will build the offshore wind farm 20 miles south of Nantucket, with an anticipated start-up date in 2025.

Mayflower beat out two other development groups in the solicitation: Vineyard Wind (comprising Avangrid and Copenhagen Infrastructure Partners) and Bay State Wind (Ørsted and Eversource). It will now negotiate a final contract with the state’s distribution utilities, a process expected to wrap up in December.

EDP Renewables, a unit of Portuguese utility EDP, is among the world’s leading renewables developers, with a major presence in U.S. onshore wind.

The announcement came earlier than anticipated, with Avangrid noting in its Wednesday earnings report that it expected to learn the result on November 8. Connecticut is expected to announce the result of its own offshore wind solicitation over the next few weeks, potentially worth up to 2 gigawatts of capacity.

Mayflower’s win comes a year and a half after Massachusetts awarded an 800-megawatt project in its first solicitation to Vineyard Wind. Put together, the 1,600 megawatts of capacity from Vineyard and Mayflower’s projects are expected to generate the equivalent of 12 percent of Massachusetts’ annual electricity demand.

The state plans to procure another 1,600 megawatts in the years ahead, to maintain momentum for the supply chain. Analysts expect Massachusetts will expand its offshore wind target further as it competes for jobs with states like New York, which has a 9-gigawatt target for 2035.

The addition of another huge project in the northeastern market, not to mention one backed by one of the world’s largest energy companies, comes as the young U.S. industry nervously awaits the outcome of additional studies the federal government unexpectedly imposed this summer on Vineyard’s project. The studies will delay Vineyard’s original construction schedule and potentially jeopardize its ability to qualify for the investment tax credit.

Mayflower did not reveal its winning bid price, but said it came in below the original price cap of $84.23 per megawatt-hour based on Vineyard’s bid last year.

While costs continue to come down in offshore wind, Mayflower appears to have bid aggressively, reflecting the desire of Shell and EDPR to begin working on a concrete project in U.S. waters.

Mayflower “proposed wind energy at a more competitive price with greater economic development benefits for the Commonwealth and the South Coast than any other bidder,” the state government said in a press statement.

Mayflower’s build schedule means it will benefit from local supply chain investments made by earlier-dated projects. Massachusetts has built a sophisticated offshore wind staging area in New Bedford, and big investments are in the works for Connecticut, New York, New Jersey and beyond.

Mayflower paid a record $145 million for its Massachusetts zone in the most recent federal offshore wind lease auction last December. Shortly afterward, Shell acquired a second lease area off New Jersey with France’s EDF.

Shell has said it may shift employees from the Gulf of Mexico to the northeastern U.S. to capitalize on the region’s coming offshore wind boom. A growing number of European oil and gas companies are growing their presence in offshore wind, among them Norway’s Equinor and Italy’s Eni.

Source: greentechmedia
Anand Gupta Editor - EQ Int'l Media Network


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