By Michael Kuser

BOSTON — The numerous East Coast offshore wind projects being developed through individual state procurements should be viewed as regional resources, panelists told a New England energy conference last week.

The 10 GW of offshore wind slated for the region has already reached a critical mass that has lowered financing costs and promises local suppliers a real market rather than a one-off opportunity, a panel of three offshore developers and one state regulator said during the Raab Associates’ 157th New England Electricity Restructuring Roundtable on Friday.

Massachusetts in 2016 set a goal to develop 1,600 MW of offshore wind by 2030, followed last year by New York, which is targeting 2,400 MW by 2030. New Jersey this year topped both with a target of 3,500 MW by the same year.

While slightly behind Massachusetts, New York is in a hurry to get rolling and plans to issue its first 400-MW offshore wind solicitation this fall, followed by a similar one in 2019, said Alicia Barton, head of the New York State Energy Research and Development Authority. (See NY Offshore Wind Plan Faces Tx Challenge.)

“I think people are looking at this the wrong way, looking at it state by state,” Barton said. “These are all leases in federal waters and this will be a growing Northeast regional resource rather than a state-by-state resource.

Although New York’s Public Service Commission will make the final determination, NYSERDA would propose to provide eligibility to projects that can either deliver directly into NYISO or through an adjacent control area, she said.

“We are eager to send the message that all of these leaseholders should be looking at this New York market opportunity and this procurement coming up,” Barton said.

First Actor Advantage

Representatives of the three developers who bid into Massachusetts’ offshore wind solicitation in December supported Barton’s regional resource theme, but each would first like to win the Massachusetts contract.

Orsted North America President Thomas Brostrom said his company will soon announce the first offshore wind factory in the U.S., to be located in Massachusetts. He said Orsted has “entered into an exclusive arrangement with a very large and recognized European manufacturing company” for the facility.

For the solicitation, Orsted partnered with Eversource Energy to form Bay State Wind, which proposed a 400-MW or 800-MW wind farm 25 miles off New Bedford, to be paired with a 55-MW battery storage facility.

“You create an industry when you have volume and pipeline,” Brostrom said. “You have basically a pipeline of 10 GW; that’s why we think we can create a local supply chain now.”

The growing reality of a Northeast offshore wind industry is already influencing bankers, who have quickly reduced the cost of project financing, he said.

In its initial request for proposals in its 83C solicitation last July, Massachusetts sought a minimum of 400 MW of offshore wind but said it would consider bids of up to 800 MW if it determines that a larger proposal “is both superior to other proposals submitted in response to this RFP and is likely to produce significantly more economic net benefits to ratepayers.”

The three developers, Bay State, Deepwater Wind and Vineyard Wind (the last of which is a joint venture between Avangrid Renewables and Copenhagen Infrastructure Partners), placed their bids in December and the state will announce winners on April 23, with contracts to be submitted at the end of July. (See Mass. Receives Three OSW Proposals, Including Storage, Tx.)

Economic Impact

Brostrom presented Orsted as the global leader in offshore wind, but Matthew Morrissey, vice president of Deepwater, said his company was the leader in the Americas, having built the 30-MW Block Island project, the only offshore wind farm operating in the U.S.

Deepwater also signed a contract with the Long Island Power Authority last year for the 90-MW South Fork project, scheduled to become operational in 2022.

In Massachusetts, Deepwater proposed two versions of Revolution Wind, a 200-MW wind farm consisting of about 25 turbines, or one double that size.

“Revolution Wind contains a very innovative, expandable transmission system, a pumped storage offering and, for a project of this scale, enormous economic impact,” Morrissey said. “The Brattle Group provided us with a study — 2,700 jobs, $300 million in economic impact, and we are committed to delivering our power in 2023.”

Deepwater’s proposal includes an agreement with the largest hydroelectric pumped storage facility in New England, the 1,200-MW Northfield Mountain station operated by FirstLight Power Resources.

“The reason why timing matters here — Alicia said it’s a regional industry and I fully agree with that — but the reality is that the first projects will decide where the first part of the supply chain goes,” said Lars Pedersen, CEO of Vineyard Wind, which submitted proposals for 400-MW and 800-MW wind farms with approximately 50 and 100 turbines, respectively. “And if you follow the logic from Europe, the more of a head start you get, the more likely you are to get more of the supply chain.”

There will be supply chain up and down the East Coast, as there should be, Pedersen said, but Massachusetts has an “incredible” starting advantage with the harbor in New Bedford. He said that synergies on the transmission side of the project would enable his company to build an 800-MW line for essentially the same cost as a 400-MW one.