Bid process starts for offshore wind purchase

Companies will have to put up $300,000 to seek contract with utilities.

0
Dong Energy, which has offshore wind farms like this one, is one of the companies interested in a possible bid on a recently released RFP.

The bid to bring offshore wind to the ocean waters 15 miles south of Martha’s Vineyard moved ahead this week when the state’s major utilities issued a draft request for proposals (RFP) on purchasing power from proposed wind farms.

Eversource, National Grid, and Unitil must by law buy power generated by renewables, as much as 1,600 megawatts over the next 10 years, as required by landmark 2016 legislation. This week’s start to bidding sets the initial phase of what will be a long process toward awarding contracts for up to 400 megawatts of electricity.

Proposals of up to 800 megawatts will be accepted “if the evaluation team determines that a larger-scaled proposal is both superior to other proposals in response to this RFP and is likely to produce significantly more economic net benefits to ratepayers compared to the alternative of procuring the additional capacity in a future solicitation after taking relevant risks into consideration.”

Each bidder must pay a $300,000 nonrefundable fee to help defray the cost of evaluating the proposals, according to the bid documents. Eligible bidders must either be offshore wind developers or have offshore development rights.

Three companies look to build offshore wind farms in the area. They include Vineyard Wind, Deepwater Wind, and Bay State Wind, a collaboration between Danish company DONG Energy and Eversource.

“We are pleased to see Massachusetts’ efforts to develop offshore wind move forward with the release of this draft RFP, and look forward to working with the state in the coming months as the RFP is finalized,” Thomas Brostrom, general manager of North American operations for DONG, said in a prepared statement. “DONG Energy believes that large-scale wind farms will produce the lowest cost of clean electricity to Massachusetts residents and businesses. We have seen through the development of more than 20 projects around the globe that utility-scale offshore wind drives the greatest economic benefits for local communities and the supply chain. We are eager to bring our expertise to Massachusetts to help the commonwealth achieve its ambitious renewable energy goals, and deliver clean, reliable, and affordable energy to the state and region.”

Another possible bidder, Deepwater Wind, also released a prepared statement. “With this draft RFP, Massachusetts is moving one step closer to making affordable offshore wind a reality for the commonwealth’s energy future,” CEO Jeffrey Grybowski said. “Deepwater Wind is excited about the opportunity to compete to deliver homegrown clean energy to Massachusetts ratepayers at the right scale, and at the right price.”

Vineyard Wind also applauded the initiative in a statement: “We are pleased that the RFP recognizes that 400 megawatts is anticipated to be the ideal project size in terms of maximizing economic benefits for the region and keeping costs low for ratepayers,” Erich Stephens, Vineyard Wind CEO, said. “We’re also pleased that the state will look favorably upon projects that can be built as early as possible, to help bring the greenhouse gas reduction and economic development benefits of offshore wind to Massachusetts sooner rather than later. We’re concerned that the timeline for the process is a lengthy one, but we remain hopeful the final RFP will provide for a quicker schedule, so that Massachusetts can get to work building its new offshore wind industry. We look forward to submitting a highly competitive bid.”

The bids will be reviewed and contracts awarded under the supervision of the state Department of Public Utilities. A final RFP is expected to be issued June 30, and the deadline to submit complete proposals will be Dec. 20. A final contract should be submitted for DPU approval by Nov. 1, 2018. Potential bidders are required to be operating before Jan. 1, 2027.

Participation by Rhode Island and Connecticut companies will be considered “if such participation has positive or neutral impact on Massachusetts ratepayers,” according to the bid documents.

The bid process also requests that the companies contemplate two different ways for the electricity to be transmitted from the wind farms to the shore — one that has them building their own transmission lines, and another that has them sharing a line with other wind farms.