Rhode Island Energy said Tuesday it would not move forward with a power purchase agreement with Revolution Wind 2, which submitted the only proposal in Rhode Island’s most recent offshore wind solicitation.
The 884-MW proposal by Ørsted and Eversource was determined to be too expensive and to not meet all the requirements of the state’s Affordable Clean Energy Security Act (ACES).
Rhode Island Energy, a subsidiary of PPL, ran the solicitation and would have purchased the electricity generated by a successful project. The company said in a news release that it will continue to work to expand the amount of power flowing off the ocean and into the Ocean State.
“We recognize some will be disappointed that we didn’t choose to move forward on negotiating this PPA, but that doesn’t mean we are abandoning our commitment to offshore wind in Rhode Island,” Rhode Island Energy President Dave Bonenberger said. “In fact, we are already in discussions with state and regional leaders about new opportunities to bring more offshore wind to the state, which we hope to progress in the coming months.”
Among those unhappy with the decision was Ørsted, the world’s top offshore wind developer.
A spokesperson told NetZero Insider via email:
“We’re disappointed that Rhode Island Energy did not select Revolution Wind 2. This project would put Rhode Island’s 100% clean energy future in reach, delivering renewable energy to hundreds of thousands of homes and creating more than $2 billion in direct economic benefits to the state, with historic investments in local union jobs, workforce training, ports and the supply chain. We will assess our options for Revolution Wind 2.”
The news came one day after federal regulators issued the environmental impact statement for Revolution Wind 1, poising it to be the fourth wind project permitted in federal waters. It would stand at least 16 miles south of Rhode Island and send 400 MW to Rhode Island and 304 MW to Connecticut.
Revolution Wind 1 also is a product of the Ørsted-Eversource partnership, which is in the process of dissolving as Eversource exits offshore wind development.
Rhode Island’s latest solicitation was launched in mid-2022, a time when developers were starting to seek renegotiation of existing deals amid soaring construction costs and interest rates.
New York attracted a robust response to its 2022 solicitation, but it included the option for a future inflation adjustment, an option that potentially will raise costs for consumers.
Rhode Island Energy, by contrast, received just the one proposal in March 2023, and its comments soon after suggested that the deal with Revolution Wind 2 would be costly.
After four months of review, the company expanded on those comments Tuesday, saying the costs were deemed too expensive for customers to bear.
“The economic development benefits included in the proposal were weighted and valued appropriately by our evaluation team, but ultimately it was determined those features did not outweigh the affordability concerns and other ACES standards,” Bonenberger said in the news release.
Rhode Island Energy said that within 60 days, it will submit a comprehensive explanation of its decision to the state Public Utilities Commission. The state Office of Energy Resources and the Division of Public Utilities and Carriers will file comments as well, the company said, and the bidders will have a chance to respond.
Rhode Island Energy said it would continue to work with the state agencies and stakeholders to find more affordable ways to bring additional offshore wind energy to the state.
Offshore wind power is an important part of the state’s strategy to use 100% renewable energy by 2033 and achieve net-zero status by 2050.
