The US offshore wind market faces challenges with the termination of another power purchase agreement, highlighting economic hurdles in the industry.
Photo for illustrative purposes.
The US offshore wind market faces another setback as Avangrid and Connecticut utilities mutually terminate a long-term power purchase agreement (PPA) for an offshore wind project in Massachusetts. Economic conditions have rendered the 804 MW Park City Wind project "unfinanceable," leading to the agreement's termination. Avangrid plans to rebid the project, which previously had 20-year PPAs secured with Eversource Energy and United Illuminating, a subsidiary of Avangrid.
This development underscores the turbulent conditions experienced by the US offshore wind industry. In a similar move earlier this year, Avangrid agreed to pay $48 million to exit a PPA for the 1,223 MW Commonwealth Wind project located off Martha's Vineyard. Rhode Island Energy also terminated its PPA for the Revolution Wind 2 offshore wind farm.
Avangrid emphasized its transparency and collaboration with utilities, state, and federal officials in its efforts to salvage the Park City Wind PPAs. The company cited significant economic challenges, including record inflation, supply chain disruptions, and sharp interest rate increases, as the factors that made the project financially unviable under its existing contracts.
Despite these challenges, Avangrid's Vineyard Wind project, an 800 MW offshore wind endeavor offshore Massachusetts, continues to progress. It narrowly avoided the issues that affected other projects and is set to become the country's first large-scale offshore wind venture upon completion. In July, Vineyard Wind successfully installed an offshore substation, marking a significant milestone in the project's development.
The US offshore wind market continues to navigate a complex landscape marked by both opportunities and obstacles, as developers seek to harness the nation's vast offshore wind energy potential.
Source: renewableenegryworld.com