US utility Eversource Energy said it remains bullish over prospects for offshore wind despite its three flagship joint-venture projects facing potential permitting delays.

The high-profile projects – the 130MW South Fork, 704MW Revolution Wind and 880MW Sunrise Wind – will be in the same lease area south of Massachusetts and Rhode Island that Eversource, the largest electric utility in New England, and 50-50 partner Orsted control in federal waters.

“Despite these near-term scheduling headwinds, we remain strongly convinced that the opportunities in offshore wind off the New England coast are excellent,” CFO Phil Lembo said on a Thursday conference call.

“We continue to view offshore wind initiatives as a unique and very positive opportunity to provide clean energy and significant economic development stimulus for the region, while providing investors with very attractive long-term earnings and cash flow benefits.”

Looking ahead, Lembo said the Eversource-Orsted team is focused on New England offshore wind development, specifically the two areas it has under lease. The first, with the three projects, has 300MW or more remaining potential capacity while the second, south of the Massachusetts island of Martha's Vineyard, has a potential 2GW or more.

Regarding possible future auctions, Lembo said, "So certainly, in New England, or if there are additional opportunities within those New England lease areas, we'd certainly take a look at it."

When asked about if the joint venture partners would look at New York, which earlier announced a future up-to-2.5GW auction, he said, "Right now, we're focused on the New England leases."

On Friday, Eversource clarified that the joint venture remains "potentially interested" in the New York auction, noting it could bid into that round with capacity from its 2GW lease area. "That area of ocean can interconnect into Massachusetts, Rhode Island or New York," Sam Eaton, director, business development and offshore wind, external affairs, told Recharge.

"Our first priority is making sure that capacity in those leases is under contract before we start looking to expand beyond that," he added.

Lembo updated analysts on each project.

South Fork

Eversource and Orsted expect the Bureau of Ocean Energy Management (BOEM) by mid-year to post a new review schedule for the Construction and Operations Plan (COP) originally filed in 2018. Last year, it paused the review process to give them time to update the project with a new, larger one square nautical mile configuration for turbines.

By providing more room for boats engaged in commercial fishing, they hope to reach accommodation with the traditional and politically influential industry that views offshore wind as a threat, in some cases, to its operations in the New England coastal offshore space. Partly in response to its concerns, BOEM last August froze federal permitting of all east coast projects.

BOEM, an agency of the Department of Interior (DOI), regulates commercial wind energy activities on the outer continental shelf beyond state territorial limits. A COP describes plans for project construction, operations and conceptual decommissioning under a commercial wind lease.

Separately, the administrative law judge overseeing the New York Public Service Commission review of South Fork extended the near-term schedule another 10 weeks until state hearings can begin, citing meeting and travel restrictions due to Covid-19.

This means testimony will be due in early August and hearings will commence by the end of September. These delays will make it very unlikely that the project can enter commercial operation as targeted by the end of 2022, according to Lembo.

South Fork has a 20-year PPA with electricity distributor Long Island Power Authority for 90MW for $160.33/MWh and is negotiating agreement for the remaining 40MW at $86.25/MWh, both with an average 2% annual escalator.

Revolution Wind

Eversource and Orsted filed the project COP on 13 March. BOEM has begun its review and they expect it to issue a full schedule for that review later this year. For now, the project is due in service at the end of 2023.

The project has 20-year PPAs for 400MW with National Grid in Rhode Island for $98.43/MWh with no price escalator. No pricing was disclosed for the remaining 304MW contracted by United Illuminating and Eversource’s subsidiary in Connecticut.

Sunrise Wind

Eversource and Orsted want to file the COP in the second half of this year although this timetable may be affected by New York’s present restrictions on offshore survey work due to Covid-19. “We expect more insight into that COP filing and the schedule for Sunrise late this summer,” said Lembo.

For now, the in-service date is the end of 2024. The New York State Energy Research and Development Agency will buy the project’s full capacity for $110.37/MWh with no price escalator under an offshore renewable energy credit (OREC) contract.

Lembo said potential delays beyond the developers’ control would not undermine the projects’ power off-take arrangements.

“Terms we have on all of our offshore wind contracts allow us some time because of delays that are caused outside of our control at BOEM, or in this case, a pandemic adding to it,” he said, referring to delivery of power.

Lembo acknowledged that delays could raise the cost of the projects. He also cautioned that they might lower them if they share either construction or leasing costs for installation vessels, or adopt larger turbines than the Siemens Gamesa 8.0-167 units they now plan to employ. “Less poles in the ocean,” he said.

Story updates with Eversource's clarification of its position regarding potential participation in the next New York offshore wind round

Wind

Eversource bullish on New England offshore wind despite potential delays