US to wrap Vineyard Wind study 'late this year or early next'

  • Sep 12, 2019
  • Recharge News

The US Department of Interior (DOI) expects to complete its extended environmental review of Vineyard Wind, the nation’s first major offshore wind farm, “late this year or early next,” meaning construction is unlikely to start at the project site of Massachusetts before the second quarter of 2020.

After the so-called Supplemental Environmental Impact Statement (EIS) is issued, a public comment period will follow during which the Bureau of Ocean Energy Management (BOEM), a DOI agency, will also hold public meetings on the 800MW project.

BOEM, which oversees wind energy development on the outer continental shelf beyond state territorial limits, did not say how long the public comment period will last but past practice would indicate 90 days.

BOEM has been saying that it wants to finish all regulatory work on the $2.8bn development by March 2020. That would comply with President Donald Trump's 2017 executive order that set a goal for federal agencies to complete environmental reviews and authorisation decisions for major infrastructure projects within two years.

A BOEM spokesman, however, told Recharge that the agency will coordinate with the Office of Management and Budget (OMB) “on potential permitting delays that may result from additional environmental review”.

Under the executive order, OMB set up the accountability system to trace federal agency performance in the processing of those reviews and related decisions.

The wind power project’s joint venture shareholders, Iberdrola-owned Avangrid and Copenhagen Infrastructure Partners had wanted to begin construction on the landmark project this year, allowing it to pre-qualify for the federal investment tax credit (ITC) at a 21% “blended rate”. The ITC sunsets on 31 December.

DOI's decision to order a new study led Vineyard Wind to defer the project as the original timeline was “no longer feasible”, while still “affirming a commitment to deliver” it.

Industry analysts say while it is unclear exactly how Vineyard Wind pre-qualified – it has four years to complete the project – they believe it has a reasonable chance to prove to the US tax authority that permitting delays were out of its control and win an extension to extract some credit value.

ITC eligibility at the 21% rate was a critical part of Vineyard Wind being able to submit a winning bid price for $74/MWh on a levelised basis in the first year (of 20) for the initial 400MW capacity and first-year $65/MWh for the balance – a record low PPA price for US offshore wind energy.

The construction delay also has implications for Vineyard’s ability to begin scheduled deliveries of electric power to Massachusetts distribution companies starting on 15 January 2022.

Recharge understands the project was seeking financial close in the fourth quarter on the provision it was permitted this summer. According to a permitting timeline made public by BOEM in late 2017, it was to have issued a final EIS on 26 April, which was then revised to 7 June.

After issuance of the final EIS, BOEM was due to publish on 19 July a so-called Record of Decision (ROD), which represents the most significant approval necessary for Vineyard to begin construction. The ROD was then delayed until 16 August.

A week before then, however, DOI instead ordered the new study to accompany a draft EIS that BOEM issued early this spring for Vineyard, saying it was necessary to learn more about the cumulative impact of all foreseeable offshore wind build-outs along the eastern seaboard before progressing to the final EIS.

The agency said stakeholders and cooperating federal agencies requested a “more robust cumulative analysis”. As of Friday, it was still developing the “cumulative impact scenario including what will be analysed in the Supplemental EIS,” a BOEM spokesman told Recharge.

Though it did not name the developer, the commercial fishing industry has criticised Vineyard Wind’s proposed turbine layout, saying it would interfere with their activities in a region where a number of other projects could be built through 2025.

News agency Reuters in late July reported that the National Marine Fisheries Service, part of the National Oceanic and Atmospheric Administration, had declined to sign off on the project’s design and more broadly noted that the developer had not fully addressed fishing industry concerns.

This delayed final EIS issuance after the agencies could not come to a “point of concurrence”.

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