SouthCoast Wind, the developer of an offshore wind lease area off the coast of Massachusetts, has started discussions with this US state’s representatives and utilities to terminate its existing Power Purchase Agreements (PPAs) citing ”material and unforeseen supply chain and financing cost increases affecting the whole offshore wind industry.”
The SouthCoast Wind, a 2.4 GW offshore wind project formerly known as Mayflower Wind, is being developed by a joint venture between Shell and Ocean Winds.
The joint venture has developed two Mayflower Wind projects in the lease area so far, the 405 MW Mayflower Wind, and the 804 MW Mayflower Wind 2, which were merged into one project last year and renamed into SouthCoast Project. The two already-developed offshore wind projects will make up for the first 1.2 GW of the total 2.4 GW SouthCoast Project.
The PPAs which SouthCoast Wind is now trying to cancel relate to the first 1.2 GW of the project.
In pre-filed direct testimony with the Rhode Island Energy Facility Siting Board, SouthCoast Wind’s CEO Francis Slingsby said that the special purpose company also plans to ”rebid our combined 83CII and III PPAs into the next round in line with the path created in the recently released Massachusetts 83CIV RFP.”
In the testimony, Slingsby added that, although open to other solutions, ”…termination, and payment of a financial penalty for termination, has become the prudent commercial course to realize the Project…”, even after potential tax incentives are factored in.
Slingsby also said that the company will continue to move the project through federal and state permitting and have the grid connections necessary to ensure the delivery of 2,400 MW of power.
”SouthCoast Wind has been working diligently with stakeholders over the past six months to seek solutions to the significant increase in projected capital expenditures and finance costs of our project,” Slingsby said.
”We believe our project can deliver more than enough clean power for every home in Rhode Island, as well as those on Massachusetts’ South Coast (Bristol, Barnstable, Dukes, and Nantucket Counties) – potentially ahead of other projects in development. In fact, we expect to have our federal permit in hand at the end of this year. In addition, our project will help meet state, regional and national climate goals, which at present are in jeopardy of falling short of target.”
