Connecticut Opens 2 GW Offshore Wind Procurement Round with Inflation-Adjusted Pricing Option

The Connecticut Department of Energy and Environmental Protection (DEEP) has issued a Request for Proposals (RFP) for 2 GW of offshore wind generation capacity. The RFP contains a few new provisions, including an indexed pricing option that adjusts for inflation and multi-state bids under the recently signed agreement with Massachusetts and Rhode Island.

The state launched the offshore wind solicitation on 27 October, with the deadline for developers to submit bids set to 31 January 2024.

As DEEP completed work on the draft RFP this summer and was preparing the final version, it was expected that the state would offer up to 1,196 MW of total offshore wind capacity in this round.

With Connecticut now procuring 2 GW of offshore wind, the total potential capacity being sought by the three states that recently signed a multi-state procurement agreement – Connecticut, Massachusetts and Rhode Island – has climbed from 6 GW to 6.8 GW.

Massachusetts launched its fourth and largest offshore wind solicitation to date on 30 August, seeking 3.6 GW of new generation capacity, and Rhode Island opened its offshore wind solicitation for 1.2 GW of offshore wind in October.

Rhode Island’s RFP contains the provision for multi-state proposals and, in line with the three states’ agreement, the same provision has been added to Connecticut’s RFP. The bidders can submit proposals to the state alone as well as multi-state bids to Connecticut along with Massachusetts and/or Rhode Island.

The solicitation in Connecticut also comprises a provision for pricing at a fixed rate or at a rate that is indexed to the price of listed macroeconomic factors and commodities and that would be fixed at a date certain in the future.

“This indexed pricing option adjusts for changes, such as inflation, that may occur after the bid due date but before the project reaches financial close (i.e., when project costs for the developer are more locked in) to adjust the final price up or down by no more than 15%,” DEEP states in a press release from 27 October.

Connecticut has also added robust requirements for environmental and fisheries mitigation plans, following recommendations from the state’s Commission on Environmental Standards. Under these stipulations, selected bidders will be required to provide at least USD 5,000/MW (approximately EUR 4,735) to support regional fish and wildlife monitoring, USD 5,000/MW for wildlife mitigation funding, and USD 5,000/MW for fisheries mitigation funding.

Connecticut is set to receive the first electricity generated by offshore wind turbines in 2025, when the Revolution Wind offshore wind farm, for which Ørsted has just made a final investment decision, is expected to be fully operational. The 704 MW Revolution Wind will supply power generated by 304 MW of its installed capacity to Connecticut under power purchase agreements (PPAs) signed in 2018.

In the state’s offshore wind solicitation in 2019, the Department of Energy and Environmental Protection also selected the 804 MW Park City Wind project, developed by Avangrid, which signed PPAs with Connecticut’s utility companies the following year.

However, as reported last month, Avangrid has terminated its PPAs for the Park City Wind offshore project with the Connecticut electric distribution companies.

The developer said it planned to rebid the 804 MW offshore wind project in the upcoming auctions.