Rhode Island offshore wind farm moves ahead even as developers scrap other projects

Alex Kuffner, Providence Journal
Updated ·4 min read
1

PROVIDENCE – The developers of a 65-turbine offshore wind farm that is key to Rhode Island’s climate goals have reaffirmed their commitment to the project, announcing late Wednesday that they’d made a “final investment decision” on the project known as Revolution Wind.

The announcement by the joint venture between Danish wind company Ørsted and New England utility Eversource represents the green light to move ahead with construction of the 704-megawatt project that would also supply power to Connecticut.

Why developers are backing out of some wind farms

While such decisions have generally been seen as formalities for previous offshore wind projects, inflation has raised construction and supply-chain costs and made it harder for developers to make as much money as they want by selling power under contracts negotiated before circumstances became more difficult for the industry. The challenges are forcing companies to rethink proposals that have been years in the making.

The GPO Amethyst transports equipment from Narragansett Bay, near Newport, to the Vineyard Wind Farm site south of Martha's Vineyard.
The GPO Amethyst transports equipment from Narragansett Bay, near Newport, to the Vineyard Wind Farm site south of Martha's Vineyard.

At the same time that Ørsted’s board of directors gave the all-clear to the Revolution project, the board moved in the opposite direction on two wind farms proposed off the New Jersey coast that would have totaled 3,300 megawatts of capacity. The company said delays in the construction schedule and high interest rates had contributed to the decision to scrap Ocean Wind 1 and 2.

When asked why Revolution is moving ahead while the New Jersey projects are not, Ørsted said the supply chains for the projects are distinct. The Ocean Wind proposals faced unique challenges, including delay of a vessel that pushed back the construction schedule, the company said.

Also helping the case for Revolution is the expectation that it will qualify for a 40% investment tax credit from the federal government, Ørsted said.

“After conducting a review of our portfolio of U.S. projects, Ørsted determined that Revolution Wind is an attractive project on a forward-looking basis,” the company said in statement.

Ørsted and Eversource in a different environment off Southern New England

But another pair of projects that Ørsted has proposed with Eversource off Southern New England to send power to New York are also facing difficulties. Authorities in the state turned down a request by the developers for an inflation adjustment to an existing power contract for a project called Sunrise Wind 1, instead leaving the door open for the companies to submit a new bid. There’s also uncertainty surrounding Sunrise Wind 2 after it wasn’t selected by the state in a separate procurement.

Ørsted and Eversource are hardly the only companies experiencing troubles. In New York, developer Equinor also unsuccessfully sought to change its contract to account for inflation.

Additionally, the companies behind two projects that would supply power to Massachusetts, Commonwealth Wind and SouthCoast Wind, paid huge penalties in the state so they could walk away from power agreements they signed. Both are hoping to win contracts with higher prices in a new procurement process that’s underway.

Momentum continues on projects off Rhode Island, Massachusetts

Despite the setbacks, the industry this past summer started seeing major progress, building upon the completion of the first offshore wind farm in America, a test project near Block Island, seven years ago. Construction started several months ago in the ocean waters off Massachusetts and Rhode Island on the first two utility-scale offshore wind farms to get the go-ahead in the nation.

The larger of the two projects, 62-turbine Vineyard Wind, which is being built by Avangrid Renewables and Copenhagen Infrastructure Partners, is expected to be completed next year. Its first turbine was installed two weeks ago. The wind farm will deliver its power to Massachusetts.

The smaller project, the 12-turbine South Fork Wind Farm, which Ørsted and Eversource are partnering on, is set to wrap up late this year or early next year. Its first turbine was shipped out of New London, Connecticut, to the project site in Rhode Island Sound on Tuesday night. The turbine is expected to be installed in the coming days.

As for Revolution Wind, even though the developers’ final decision on construction didn’t come until this week, they’ve been working for several months on pieces of the project. In May, Gov. Dan McKee and Rhode Island’s congressional delegation gathered at a facility built by Ørsted and Eversource in the Port of Providence to mark the beginning of fabrication of components for the Revolution turbines.

Workers at the Port of Providence are assembling parts for the South Fork Wind Farm, a commercial-scale project taking shape in Rhode Island Sound between Block Island and Martha's Vineyard.
Workers at the Port of Providence are assembling parts for the South Fork Wind Farm, a commercial-scale project taking shape in Rhode Island Sound between Block Island and Martha's Vineyard.

And following federal approval of the proposal in August, onshore construction started along the route of a transmission cable that would run from the wind farm about 17 miles south of the Rhode Island coast to the Quonset Business Park in North Kingstown. Offshore work will begin next year and the wind farm is scheduled to go into operation in 2025.

Editor's note: This story has been updated to include a more recent map of the Revolution Wind location, as well as to reflect that Sunrise Wind is located off Southern New England but will provide power to New York.

This article originally appeared on The Providence Journal: As costs rise for offshore wind, Revolution project remains "attractive"