Vineyard to take 4-6 weeks to assess US offshore project delay

Monopile supplier Sif says it is helping the developer investigate the impacts of the environmental permitting delays on the 800MW project off Massachusetts

Developer Vineyard Wind will need four to six weeks to assess the impact for the first commercial-scale US offshore wind project after a federal agency’s recent unexpected decision to delay issuance of a final environmental study necessary for construction start this year, according to monopile supplier Sif.

Vineyard – owned 50% each by Iberdrola’s Avangrid and Copenhagen Infrastructure Partners – on 8 July awarded Netherlands-based Sif a landmark contract for 84 monopiles with production at a facility there scheduled for first half 2020.

On Tuesday, spokesman Scott Farmelant told Recharge that Vineyard executives are not making public comments about the project at this time.

Vineyard had anticipated the Bureau of Ocean Energy Management (BOEM) to approve the Final Environmental Impact Statement (FEIS) on 12 July and when this didn’t occur, early the next month.

The developer had told BOEM that it would be challenging to move the project forward as configured without a FEIS by the end of this month given the tight timeline to close financing and remaining supply chain contracts.

On 9 August, BOEM surprised Vineyard and global investors by announcing it would carry out further environmental studies to supplement those already done for the project planned off the southern coast of Massachusetts, plus analyse “cumulative impacts” of all wind projects awarded PPAs along the east coast.

“This unexpected requirement is a good example of the volatility of the offshore wind market,” Sif said in a statement, adding it was working with Vineyard to investigate the impact and “possible mitigation of the delays caused hereby.”

Vineyard on 13 August acknowledged the original timeline was no longer feasible, while affirming a commitment to deliver an 800MW project in a different configuration. It had targeted completion of an initial 400MW capacity by the end of 2021 and the balance within the next 12 months.

BOEM has told offshore developers that it will complete and publish a FEIS for their projects within two years from when they submit a Construction and Operations Plan. For Vineyard, that will be in March 2020.

President Donald Trump signed an executive order in 2017 that limits environmental reviews to 24 months for major infrastructure projects.

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Delays could upend Vineyard's efforts to qualify the project for the federal investment tax credit (ITC) worth 24% of total capital costs for the first 400MW capacity and 18% for the remaining 400MW. The ITC expires at the end of this year.

ITC eligibility is critical for the project to deliver the contracted first year levelised $74/MWh price for the initial 400MW and $65/MWh for the balance.

Sif said the delays will impact its production planning for 2020, although it cautioned to what extent is not yet clear “as this depends on how Vineyard Wind decides to proceed.”

Once Vineyard provides clarity on a new schedule, Sif can then assess the impact on production planning and schedule, it said.

“Only at that time it will be clear if there is a financial impact beyond the provisions in the contract and what mitigating actions Sif is able to take,” it added.

Installation of the monopiles is subject to a schedule that includes seasonal restrictions on pile driving activity as a protective measure for the highly endangered North Atlantic Right Whales.

Sif says its ability and confidence to meet this schedule was an important consideration in being selected by Vineyard.

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