Avangrid Renewables, one of two companies behind Vineyard Wind, the first commercial-scale offshore wind project in the US, is exploring options to complete the project ahead of schedule, but efforts to secure renewable technology resource status in a recent capacity auction were unsuccessful
Announcing details of its Q4 and FY2018 earnings results while providing a 2019 earnings outlook, Avangrid Renewables’ parent company, Avangrid Inc, part of Iberdrola, said it is looking at ways to complete the Vineyard Wind project in 2021, a year earlier than planned.
Avangrid chief executive James Torgerson told investors that the company’s projects in the US remain on track and said the 800-MW Vineyard Wind offshore windfarm it plans to build in a joint venture with Copenhagen Infrastructure Partners is making progress on key approvals and permits.
Mr Torgerson said the company expected to begin construction in late 2019, but explained that it is also assessing whether it might be possible to complete both 400-MW tranches of the 800-MW project by 2021.
The original plan for the project – the first commercial-scale offshore windfarm in the US – was for Vineyard Wind to be built in two stages, with work beginning in 2019 and the first 400-MW stage coming online in 2021, with the second 400-MW stage coming online a year later. Mr Torgerson said the company was still considering whether an accelerated schedule might be possible.
“We expect the state and federal approvals by the end of 2019, the financing in place in the same time frame, engineering will be done in 2019, and we’re going to award the long lead items this year as well. And then the construction will commence in beginning of 2020," he explained.
“The first 400 megawatts are expected to be operational by the end of 2021 and the next 400 megawatts by 2022. We’re looking to see if we can accelerate that to get everything in 2021, but that’s still a work in progress,” Mr Torgerson said.
The company earlier announced it had signed a preferred supplier agreement with a contractor to build the substations for the project. Mr Torgerson said that negotiations about long-lead items for the project were also at an advanced stage. As highlighted by OWJ, in November 2018, Vineyard Wind selected MHI Vestas as preferred supplier of the turbines for the project, and a facility in Albany in New York will manufacture the foundations. Anbaric Development Partners is the company’s partner for the export cable for Vineyard Wind.
Vineyard Wind also continues to advance through the permitting process towards construction and operation. In February 2019, the Executive Office of Energy and Environmental Affairs approved the project’s Final Environmental Impact Report (FEIR). The decision finalised the Massachusetts Environmental Policy Act (MEPA) review process for the project, allowing it to proceed with state, regional and local permitting. With MEPA certification, the project will now seek permit review from the Cape Cod and Martha’s Vineyard Commissions, and the Barnstable Conservation Commission, among others.
FEIR certification was the latest milestone for Vineyard Wind as it advances through permitting. Other progress to date includes ongoing review of the power purchase agreements by the Department of Public Utilities, a process expected to conclude in March 2019; executing a Host Community Agreement with the Town of Barnstable in October 2018; completing evidentiary hearings before the Massachusetts Energy Facilities Siting Board in October 2018, with a tentative decision expected in March 2019, and final decision anticipated in early April; and executing a lease with the 26-acre New Bedford Marine Commerce Terminal in October 2018 to support construction of the Vineyard Wind project.
The company intends to partner with two companies in Bridgeport, McAllister Towing and Bridgeport Boatworks, to develop the offshore windfarm. If approved, this initiative will mean that over 500 jobs will be created during the construction phase and 1,900 during the entire project. It will also bring in over US$4Bn in revenue to the state, improve the reliability of the electricity supply and stabilise prices.
Not everything has been plain sailing for Vineyard Wind, however. In early February 2019, it asked the Federal Energy Regulatory Commission (FERC) for a waiver that would have enabled the windfarm to take place in a capacity auction. In an emergency motion it asked FERC to halt an Independent System Operator New England (ISO-NE) forward capacity auction due to start on 4 February. Ultimately it was unsuccessful.
The company was seeking renewable technology resource (RTR) status in the auction, which would have exempted it from the auction’s minimum offer price rule. Weeks earlier, it unsuccessfully requested a waiver of ISO-NE tariff provisions that require RTR exemption to be granted only to resources within the borders of a New England state. In mid-February, the company called on FERC to rerun the ISO-NE capacity auction so that offshore wind could participate. It said that doing so would reduce capacity prices and save consumers millions of dollars as a result.
To clarify what it described as "misinformation that has been reported in the press and circulated online," ISO New England’s ISO Newswire recently published some of what it said was the background on Vineyard Wind’s participation in the auction. It said that Vineyard Wind participated in both FCA 13’s primary auction and secondary substitution auction and that the offshore windfarm secured a 54-MW capacity supply obligation during the substitution auction.
“At issue is the RTR exemption, which allows for a certain volume of megawatts from New England-based renewable resources to be exempt from the minimum offer price rule that applies to new resources in the primary auction. Renewable resources do not need to be designated as RTRs to participate in the primary or substitution auctions,” it explained.
“During the qualification process for FCA 13, it was determined that the RTR exemption language precluded resources in federal waters from receiving the exemption. Realising this stakeholder-submitted language in the tariff diverged from the initial intent of the provision, ISO New England, working with the New England states and members of the New England Power Pool, filed tariff changes on 30 November 2018 to allow offshore wind resources located in federal waters – such as Vineyard Wind – to qualify for RTR treatment in FCA 13 and future auctions. These changes were approved by FERC on 29 January 2019.
“As part of the changes, resources located in federal waters that wished to participate in the FCA 13 auction as an RTR would need to seek a waiver from FERC since deadlines for qualifying for the auction had passed,” said ISO Newswire.
“Vineyard Wind applied for this waiver on 14 December 2018. The ISO filed comments on Vineyard Wind’s waiver request, stating that it did not oppose the waiver and if FERC approved the tariff language changes by 29 January the resource would receive RTR treatment for FCA 13. As of 8 February 2019, FERC had not yet acted on the waiver request,” it said.
“Because the Commission did not act on the waiver request in time for the auction, Vineyard Wind did not receive RTR treatment in FCA 13. Vineyard Wind filed an emergency motion on the day of the auction, asking FERC to either delay the auction, or to require it to be rerun later, after FERC ruled on Vineyard Wind’s waiver request. FERC did not act on the request for stay before the auction. The ISO conducted and concluded the primary auction in accordance with FERC-approved rules on 4 February 2019.
“While ISO New England did not oppose Vineyard Wind’s request for a waiver to allow it to receive RTR treatment in the auction, the ISO did oppose Vineyard Wind’s request to delay or rerun the auction because doing so would harm market participants who made decisions under the expectation that the auction results would be final, subject to FERC approval.”
However, it seems that offshore wind projects in federal waters, including Vineyard Wind, will be eligible for the RTR exemption in next year’s auction.