As Vineyard Wind Gets Go Ahead, Long-Term Costs for Consumers Remain Cloudy

With federal approval of an 84-turbine, 800 megawatt wind farm off the coast of Massachusetts on Tuesday, the path is now clear for a number of outsized wind projects planned off the coast of the northeastern United States.

Vineyard Wind, located in the Atlantic Ocean south of Martha’s Vineyard and Nantucket, will be the first utility-scale offshore wind project in the U.S., following a much smaller 30 MW Block Island wind project off of Rhode Island and a 12 MW pilot project for Dominion Energy off the coast of Virginia.

The $2 billion Vineyard Wind project will provide Massachusetts with enough electricity to supply 400,000 homes. It is a 50/50 partnership between Avangrid – the parent company of Connecticut-based United Illuminating – and Copenhagen Infrastructure Partners.

The turbines are expected to be installed in the summer of 2023, after cables connecting to the onshore power grid are laid earlier that year, according to Southwire, the company that the Vineyard Wind partnership has contracted to lay the cables.

Needed environmental permits from Department of the Interior had been delayed under the Trump administration, but have sped toward approval since President Joe Biden has made expanding offshore wind generation a focus in the first few months of his administration.

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Connecticut has not agreed to buy any power from the first Vineyard Wind installation, but the state has selected the same partnership to develop Park City Wind – a proposed 804 MW wind farm that will provide about 14 percent of Connecticut’s electricity if it comes online in 2025 as planned. 

That project also includes a redevelopment of the Bridgeport Harbor.

“The Bureau of Ocean Energy Management’s comprehensive and thorough review of Vineyard Wind 1 ensures that both the project and the offshore wind industry are moving forward,” DEEP spokesman Will Healey said. 

Healey said the Park City Wind project – developed by Vineyard Wind – is on track and expected to come online in 2024.   He described the projects as “critical” to decarbonizing the regional electric grid.

Eversource and United Illuminating have agreed to purchase all 804 MW from the Park City project at a price of $79.83 per MWh. The utilities will also purchase about 200 MW from the Orsted-Eversource Revolution Wind project at a price of $99.50/MWh, as well as a 104 MW expansion of that project for $98.43/MWh.

The utilities will pass on those costs through the same mechanism used for other state-mandated power purchase agreements. Millstone Nuclear Power Plant is currently contracted to sell nearly half of the power produced at the Waterford plant – over 1,000 MW – at a price of $49.99/MWh. 

Eversource blamed that contract for a rate hike last July, and asked regulators for an additional rate hike this year, again citing the costs of the huge Millstone contract that supplies about a quarter of the electricity consumed in Connecticut.

Spot market energy prices in Connecticut have averaged about $45 per MWh since January 2018 – and have ranged from monthly averages of $27.35/MWh in March 2020 to $119.99/MWh in January 2018 when an extreme cold snap caused natural gas prices to skyrocket.

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