First Large-Scale US Offshore Wind Farm to Lower Electricity Bills
The 800MW Vineyard Wind offshore wind farm will deliver electricity at a total levelized price of USD 65/MWh for energy and Renewable Energy Credits (RECs), lowering the Massachusetts electricity users' monthly bills by up to 1.5%, the state's Department of Energy Resources (DOER) said.
Vineyard Wind and the Massachusetts EDCs have now concluded negotiations on the long-term contracts for the Vineyard Wind project. The contracts were filed to the state's Department of Public Utilities (DPU) for review and approval on 31 July.
The agreed electricity price is materially below the levelized projected costs of buying the same amount of wholesale energy and RECs in the market, which is projected to be a total levelized price of USD 79/MWh in 2017 dollars over the 20-year term of the contracts, DOER said in a letter sent to DPU.
Over the life of the contract, the 800MW Vineyard Wind project is projected to provide an average USD 14/MWh of direct savings to ratepayers, according to the letter. This translates to a reduction in customer’s monthly bills, all else being equal, of approximately 0.1% to 1.5%, DOER said.
Overall, the total direct and indirect benefits to Massachusetts ratepayers from the long-term contracts with Vineyard Wind are expected to be USD 35.29/MWh on average over the term of the contracts, with total net benefits of approximately USD 1.4 billion, according to DOER.
The long-term contracts will be delivered in two phases with expected commercial operation dates of 15 January 2022 for the first 400MW phase, and 15 January 2023 for the second 400MW phase.
DOER has strongly supported the 800MW project and has recommended that DPU approves the long-term contracts.
“Today’s historic filing represents the start of an industry, one that will assure access to abundant clean energy resources for decades to come, and Vineyard Wind is pleased to offer a competitive price to energy consumers in the Commonwealth of Massachusetts while continuing to advance the clear environmental and economic benefits associated with offshore wind,” said Lars Thaaning Pedersen, CEO of Vineyard Wind.
“By utilizing Federal Investment Tax Credits within the structure of a long-term power purchase agreement, Vineyard Wind was able to offer an attractive price to the benefit of consumers while creating value for its shareholders. This long-term investment and commitment to Massachusetts will stimulate job growth, economic development and acceleration of an emerging offshore wind industry in the United States.”
Vineyard Wind, a joint venture of Avangrid Renewables and Copenhagen Infrastructure Partners, will be built some 14 miles south of Martha’s Vineyard on a lease area covering some 160,000 acres.