Vineyard Wind looks to regain spot in project pipeline

Boston Statehouse

Vineyard Wind 1 Offshore Wind Energy Project (BOEM.gov)

BOSTON (SHNS) – With a new federal administration in charge that’s expected to be far more receptive to renewable energy projects and specifically offshore wind, Vineyard Wind said Monday it is ready to resubmit plans for a wind farm 15 miles south of Martha’s Vineyard that it yanked from federal review in early December.

Following a string of permitting delays imposed on the project by the Trump administration, Vineyard Wind on Dec. 1 announced that it was pulling the 800-megawatt project out of the federal review pipeline in order to complete an internal study on whether the decision to use a certain type of turbine would warrant changes to the project’s construction and operations plan.

Vineyard Wind said Monday that its internal review determined that no changes are needed and that “the Federal Permitting Process can be Completed” by the Bureau of Ocean Energy Management.

Officials at Vineyard Wind said the company has not had detailed conversations with the Biden administration about its resubmittal, but expressed confidence Monday that BOEM could resume the National Environmental Policy Act (NEPA) review process for Vineyard Wind, despite the Trump administration having declared its process “terminated” in mid-December.

“The whole intent of NEPA is not to go through a process that starts with a Point A and then gets to a Point B and it has to go through a prescribed process, it is evaluating the impact of the project,” Vineyard Wind CEO Lars Pedersen said. “So since we have no changes and this project has been under review for three years … at least in our opinion, all the data is there for BOEM to make a decision. There is precedent that other projects have a similar process and there is precedent in our view for this resuming.”

When developers of the Copenhagen Infrastructure Partners and Avangrid Renewables joint venture pulled the project from review in December, the Trump administration officially declared Vineyard Wind’s federal permitting process “terminated” with a posting published in the Federal Register.

But Pedersen said Monday that Vineyard Wind’s view is that the Federal Register notice “doesn’t have any legal meaning in the NEPA process” by itself and was really just public confirmation of what Vineyard Wind had requested.

“I think it was a notification to the public that BOEM had stopped its review, which is not unsurprising since we asked them to stop that review. So I think there’s nothing preventing them from telling the world that they are reviewing the project again, but of course it’s up to BOEM what exactly that process will be when they decide to review the project again.”

Vineyard Wind was the first offshore wind project selected by Massachusetts utility companies with input from the Baker administration to fulfill part of a 2016 clean energy law. It is projected to generate cleaner electricity for more than 400,000 homes and businesses in Massachusetts, produce at least 3,600 jobs, reduce costs for Massachusetts ratepayers by an estimated $1.4 billion, and eliminate 1.68 million metric tons of carbon dioxide emissions annually.

It remains unclear how the new Biden administration will treat the Vineyard Wind project. Pedersen said Vineyard Wind has not had “specific discussions” with the Biden administration but said the company was “in detailed contact” with both the Trump and Biden camps during the presidential election.

“We have had sort of initial indications from the Biden team in general that they are favorable to renewable energy, but I don’t think I’ve seen any specific or particular announcement regarding to offshore wind. So, I think as they get their staffing together we will probably hear more about this project, but at least our overall understanding is that they wish to see renewable energy moving forward and also offshore wind is part of that plan.”

If Biden’s BOEM goes along with Vineyard Wind’s wishes, Pedersen said, the company expects that the federal agency would publish its final environmental impact statement and then issues its record of decision “sometime in the first half of 2021.” That would allow the project to hit its financial close milestone sometime in the second half of this year, begin on-shore work quickly thereafter, start offshore construction in 2022, begin installing turbines in 2023 and begin exporting power to the grid in late 2023, Pedersen said.

The project, which was upended by an August 2019 decision from the Trump administration to conduct a much broader assessment of potential offshore wind projects, is already more than a year behind schedule. Vineyard Wind had originally planned to financially close on the project and begin on-shore construction work in 2019, put the first turbine into the seabed in 2021 and have the wind farm generating electricity in 2022.

Pedersen said Monday that a provision tucked into last month’s massive stimulus and federal spending package that changes eligibility criteria and increases the value of a key investment tax credit will help Vineyard Wind overcome some of the financial problems that arose when the Trump administration essentially paused the permitting process in August 2019.

“One of the main challenges this project had was that when we got the last-minute delay in August 2019, one of the reasons why we could offer such a low price to Massachusetts consumers was that we were targeting a tax credit bracket that then no longer was available to us due to the delay,” he said. “And with the new tax credit legislation, it basically puts the project more or less back where we were before the delay. So, in that sense, it has been a positive impact on the project and helps us overcome some of the significant financial challenges we were facing after the August 2019 decision.”

The second offshore wind project chosen to fulfill part of the 2016 law, the Mayflower Wind project being developed by OW North America and Shell, announced earlier this month that the investment tax credit provision (and a provision included in the project’s contracts that requires it to reduce its prices if it qualifies for a greater tax credit) is likely to lead to a roughly 10 percent drop in the cost of the power it generates.

That project is expected to be operational about 26 nautical miles south of Martha’s Vineyard by December 2025.

Before it requested and the Trump administration granted a withdrawal of the construction and operations plan, Vineyard Wind was on track to be the first utility-scale offshore wind farm in the United States. That designation will likely depend on whether the Biden administration picks up where Trump’s BOEM left off, but Vineyard Wind said Monday that it remains “slated to become the first large-scale offshore wind farm in the United States.”

A 30-MW project consisting of five turbines is already operational off Block Island and a two-turbine pilot project is generating power off the coast of Virginia. By 2026, the American Wind Energy Association said, there are expected to be 14 offshore projects totaling 9,112 MW of capacity in operation.

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