Three New England states are teaming up to buy offshore wind power together in a move that aims to boost the struggling industry and help the region reach its clean energy goals.
Connecticut Gov. Ned Lamont announced the agreement Wednesday, saying it would help to “chart the course for the years to come” on offshore wind. The three states will issue a joint solicitation for up to 6,000 megawatts of offshore wind power in 2024.
The move comes as the offshore wind industry is facing rising costs and supply chain challenges. However, the states believe that by working together, they can get better prices and attract more developers.
“We’ve got some challenges there. Some of it related to supply chain, some of it related to interest rates. And you take that into account, but you have to believe that wind is going to be a key piece of our state’s future, our region’s future, and our country’s future,” Lamont said.
The agreement was welcomed by industry groups.
It was just weeks ago that Bloomberg reported that Ørsted’s CEO Mads Nipper said abandoning U.S. wind projects was a “real option,” without more support from the Biden administration.
In response to that report, a spokesman for Ørsted said, “There will be no impact. Our commitment to New London’s State Pier remains and we are currently marshaling wind turbines for our South Fork Wind project.”
The statement went on to say, “Locally, Revolution Wind has already begun onshore construction, with advanced foundation components being assembled by union labor at our ProvPort assembly hub. The U.S. offshore wind industry remains attractive, and we will continue to invest into and build more American clean energy and create good-paying local jobs.”
On Wednesday, David Ortiz, the Ørsted government affairs chief, said “The strategic roadmap that we’re unveiling today really speaks to the commitment that Connecticut, this administration, and really the commitment stakeholders throughout the state have to addressing climate change through decarbonization.”
The news follows other troubling signs for the wind industry earlier this week in which Avangrid, the developer of Connecticut’s largest proposal for offshore wind, said that rising costs have made the Park City Wind project too expensive to deliver power at contracted rates promised to utilities.
Eversource CEO Joe Nolan said, “today’s a big day for Connecticut’s energy future.”
Eversource is the utility that sold its share of some leased offshore wind sites off the coast of Massachusetts for $625 million to Ørsted.
“It’s imperative that we transition to a sustainable future,” Nolan said.
The states say that the joint solicitation is just the beginning of their collaboration on offshore wind. They are also working together to develop a regional offshore wind transmission grid and to support the development of a domestic offshore wind supply chain.
The agreement is a major step forward for offshore wind in the United States. It is also a sign that states are increasingly willing to work together to address climate change and build a clean energy economy.