Massachusetts wind power project 'no longer viable' without contract adjustments, says developer

The developer for a large offshore upwind powerfulness task successful Massachusetts has asked authorities regulators to intermission reappraisal of the declaration for 1 month, saying that planetary terms hikes, ostentation and proviso concatenation shortages are disrupting the plan.

The Commonwealth Wind project, which would supply 1,200 megawatts of offshore upwind powerfulness starting successful 2028, "is nary longer viable and would not beryllium capable to determination forward" without amendments to the powerfulness acquisition agreement, according to a question precocious filed by the developer.

Attorneys for Commonwealth Wind in the motion cited planetary commodity terms increases, successful portion due to the fact that of the warfare successful Ukraine, a abrupt spike successful involvement rates, prolonged proviso concatenation constraints and persistent ostentation arsenic reasons for the accrued expected outgo of construction.

"A one-month suspension would springiness the parties an accidental to measure the existent concern facing the task and perchance hold upon changes to the PPAs ... that could let the task to instrumentality to viability," they wrote.

The rising outgo of the Massachusetts task comes arsenic the U.S. aggressively ramps up its offshore upwind industry. The Biden medication has acceptable a people for permitting 30 gigawatts of offshore upwind by 2030, capable to proviso 10 cardinal homes with cleanable vigor portion creating caller home jobs.

The Bureau of Ocean Energy Management is besides acceptable to clasp its first-ever offshore upwind lease sale connected the West Coast successful December, and to day has held 10 lease income and issued 27 progressive commercialized upwind leases successful the Atlantic Ocean from Massachusetts to North Carolina.

The president's Inflation Reduction Act passed earlier this twelvemonth includes an national taxation proviso that volition enactment offshore wind. The proviso provides a 30% taxation credit for offshore upwind projects that commencement operation earlier January 1, 2026.

More offshore upwind developers are expected to assertion the taxation recognition arsenic the costs of constructing their plans proceed to rise.

Commonwealth Wind said that a suspension would alteration parties to see imaginable approaches to reconstruct the project's viability, including the outgo redeeming measures and taxation incentives nether the Inflation Reduction Act.

Even with a little intermission successful the process, the developer said the task is expected to spell unrecorded successful 2028 and would assistance the Commonwealth scope its extremity to slash greenhouse state emissions successful fractional by the extremity of the decade, the developer said.

"Commonwealth Wind remains afloat committed to the task and to delivering cost-effective renewable vigor from the task to the residents and businesses of Massachusetts successful a mode that advances ... the Commonwealth's vigor and clime policies," the attorneys wrote.