The businesses behind the Vineyard Wind joint venture are restructuring their agreement to allow one party to focus on existing projects and the other to develop an open lease area.
Avangrid (NYSE:AGR) subsidiary Avangrid Renewables and Denmark-based Copenhagen Infrastructure Partners (CIP) said Tuesday that the shift will allow them to “leverage their strengths and expertise to continue to grow the U.S. offshore wind industry.”
While the companies will proceed with development of the 800-MW Vineyard Wind 1 project as a joint venture, Avangrid will have the option to take operational control of the project following construction.
Avangrid also will buy the lease area (OCS-A 0534) with the proposed 804-MW Park City Wind project and the recently announced Commonwealth Wind project bid under Massachusetts’ 83C iii competitive solicitation that opened in May.
Avangrid Renewables will take control of the lease area for the Park City Wind project and the newly proposed Commonwealth Wind project, while Copenhagen Infrastructure Partners will take control of a nearby, undeveloped lease area. | Vineyard WindCIP will take control of a nearby lease area (OCS-A 0522) for development. The 132,000-acre area “has the highest wind speed of any lease area in the Northeast and will be a very competitive site for solicitations from New York to Massachusetts,” Christian Skakkebæk, senior partner in CIP, said in a statement.
The companies estimate that the lease area has 2,500 MW of offshore wind energy potential.
Avangrid will make a net payment of $167.5 million to acquire OCS-A 534 and, in exchange, CIP will acquire OCS-A 522. The companies expect to close the transaction by next spring.
Project Activities
Vineyard Wind 1 recently reached financial close, raising $2.3 billion of senior debt though nine international and U.S. banks, the companies said on Sept. 15. As a result, the companies have begun providing project contractors with notices to proceed with construction activities, they said.
Onshore work is scheduled to begin in the fall in Barnstable, Mass., with offshore work scheduled to begin next year.
The companies also submitted two proposals for their Commonwealth Wind project in the Massachusetts competitive offshore wind solicitation. The proposals offer 800 MW and 1,200 MW of wind energy.
Public versions of the bids are due this Thursday, and the state will publish them on its clean energy solicitation website.