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Dive Temporary:
- An Avangrid subsidiary on Friday requested Massachusetts regulators to dismiss their evaluation of energy buy agreements tied to the 1,223-MW Commonwealth offshore wind farm, saying the $72/MWh PPAs are not viable due to inflation and different financial disruptions and provide chain issues.
- Eversource Power, Nationwide Grid and Unitil refused to renegotiate the 1.2-GW PPAs, Commonwealth Wind, the subsidiary, stated, noting it plans to rebid the challenge in an upcoming solicitation, in response to a filing on the Massachusetts Division of Public Utilities.
- The submitting “illustrates how rapidly the economics of such initiatives can appear to vary within the present setting, and apparently how resistant the Massachusetts [utilities] are in accommodating the challenge’s renegotiation efforts,” Paul Patterson, a Glenrock Associates fairness analyst, stated in an e mail.
Dive Perception:
The Commonwealth wind farm was underneath contract to Eversource Power, Nationwide Grid and Unitil as a part of Massachusetts’ purpose of including 5.6 GW of offshore wind. The wind farm was set to begin working in 2028.
The Commonwealth project can’t be financed and constructed underneath the present PPAs, in response to Avangrid.
“Amongst different elements, the extended warfare in Ukraine has unsettled markets and elevated prices for a lot of merchandise, inflation has been persistent, rates of interest have elevated in a way unprecedented in latest instances, commodity costs have risen sharply and provide shortages and supply-chain constraints as soon as regarded as short-term stay pervasive,” Commonwealth Wind stated.
Additionally, price will increase for offshore wind gear, reminiscent of generators, have been “unprecedented,” Commonwealth Wind stated.
“The most effective path ahead to advance the needs of … the commonwealth’s clear vitality objectives is for the offshore wind vitality technology capability at present included within the PPAs to be procured within the subsequent solicitation under Section 83C,” Commonwealth Wind stated.
Commonwealth Wind plans to bid into the solicitation, set for April, and supply its challenge with “cost-effective pricing, a superior timeline for completion, and distinctive financial growth alternatives,” the corporate stated.
Renewable vitality builders round the USA have been shifting to renegotiate latest PPAs which were disrupted by provide chain bottlenecks and different financial challenges. Pacific Fuel & Electrical, for instance, in September requested the California Public Utilities Fee to approve price hikes for PPAs tied to 4 battery storage initiatives totaling 580 MW.
Avangrid Renewables, Avangrid’s renewable vitality arm, can be renegotiating photo voltaic, onshore wind and offshore wind contracts, Pedro Azagra Blázquez, Avangrid CEO, stated throughout an Oct. 26 earnings convention name.
Avangrid and Copenhagen Infrastructure Companions are constructing the 800-MW Winery Wind 1 wind farm close to Martha’s Winery and Nantucket. The challenge is on observe to start producing electrical energy late subsequent 12 months and be full in 2024, in response to Avangrid, which expects to spend $3.7 billion on its 50% share of the challenge.
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