Connecticut swears off offshore wind, raising concerns about its motives

It was supposed to be New England’s largest and most innovative offshore wind initiative — a three-state (Connecticut, Massachusetts and Rhode Island) bid designed to secure the best prices and efficiencies for a large amount of new offshore wind that would be key to creating carbon-free energy to help curb climate change.

It was the first such effort in the United States and would also restart the process of offshore wind energy in the region, which has suffered setbacks in the past year due to unstable domestic and international economies, inflation and more than a few geopolitical issues.

But when the selected project from the March call was finally announced, a few days after Labor Day, Connecticut disappeared. A brief statement from the state The Department of Energy and Environmental Protection congratulated the other states and then said simply: “Evaluation of project bids is ongoing in Connecticut and we will announce a final decision on our solicitation at a future date.”

South Fork Wind under construction east of Montauk Point. Already operational.
Credit: Eternal fountain

To be fair, there have been signs for several weeks that the state would not be following the same schedule as its neighbors, but Connecticut’s absence has prompted more than a little private speculation that politics — specifically around high electricity rates that are providing fodder for the Republican campaign this election season — are playing a role.

“We don’t know, but we do know that it’s been a complicated issue in the state,” said Kate Sinding Daly, senior vice president of law and policy at the Conservation Law Foundation (CLF). “We’re hopeful that Connecticut will, as they say, continue to evaluate the opportunities and perhaps come up with one or more projects.”

Gov. Ned Lamont told The Connecticut Mirror this week that his reason for being cautious about a new offshore wind commitment is its high cost, which would compound existing high electricity rates, coupled with the reality that the state is already essentially subsidizing the Millstone nuclear power plant. At 2,100 megawatts, Millstone is the region’s largest source of power, all of it carbon-free.

“We are the ones subsidizing nuclear power, the largest source of carbon-free energy. I am very concerned about affordability, especially now,” Lamont said. “I had some previous conversations about that and I’m still thinking about it.”

For now, Gov. Ned Lamont is holding off on committing to new offshore wind because of its high cost, even though he was fully committed less than a year ago. Credit: PAZNIOKAS MARK / CTMIRROR.ORG

But some privately worry that Lamont could disengage, as he did in 2021, when the transportation and climate initiative, TCI, faced massive opposition from Republicans and others.

“This feels eerily similar,” said one advocate, who asked not to be identified.

But most took Lamont at his word when he said his calculation was about money, not politics or the upcoming election.

“From the bottom of my heart, I hope that possibility is not considered. If it is announced after the first week of November, I would be very upset,” said Sen. Ryan Fazio, R-Greenwich, ranking member of the Energy and Technology Committee. “I think the governor is very reluctant to sign a contract to buy electricity at three or four times the wholesale market price. He’s a businessman; he understands that it’s a bad deal for Connecticut consumers, and I think the hope that he and I and others have is that these projects, these megawatts, become much cheaper and more competitive in the future. We should not be buyers at any price.”

Rep. Jonathan Steinberg, D-Westport, and co-chair of the committee, agreed that money was the central issue for the governor, who had met with committee leaders to discuss the situation. “He’s very focused on the suffering of taxpayers right now and he doesn’t want to put his imprint on something that’s going to increase rates,” Steinberg said, adding that a deal reached now wouldn’t affect taxpayers’ rates for years.

Rep. Jonathan Steinberg, D-Westport. Credit: CTMirror.org

At the same time, he remained hopeful that the political and price landscape would change quickly.

“Will he change his strategy right after the election? I hope so, absolutely. I’ve been urging him to do so,” Steinberg said. “I would have thought that he might have hedged his bets and made a fairly small acquisition… I would have expected something.”

Steinberg and climate advocates repeatedly pointed to the need for offshore wind to help meet the state’s mandate for a zero-carbon grid by 2040, reduce greenhouse gases and other climate-warming emissions that plague the region, and help meet an increased need for power supplies as motor vehicles, heating and other big energy consumers like data centers turn to electricity as a fuel source.

“Developing our offshore wind resources is absolutely critical to achieving our energy and climate goals, that much is clear,” said Charles Rothenberger, climate and energy attorney for Save the Sound. “These projects need to get underway.”

“We continue to expect Connecticut to announce something, or for negotiations to continue, even among the three states, and for this to result in more projects being announced,” said CLF’s Daly. “The fact that this still represents progress is a positive point.”

Both noted that offshore wind power really goes into the New England grid, where all states benefit from the energy as well as the associated job creation and, ultimately, lower energy prices.

But the current situation is not what was originally envisioned for regional offshore wind development, and this is putting some pressure on Connecticut to follow through on its commitment, especially since the state was a key player in developing this particular coalition, as well as others aimed at modernizing and decarbonizing power and transmission on the New England grid.

What happened

Several projects were already underway in the region when inflation soared, supply chains fractured and global economies faltered as a result of COVID and the Russian invasion of Ukraine.

Some East Coast offshore wind developers tried to renegotiate their deals to accommodate the now higher costs. Others backed out of their agreements.

Among them was Avangrid, which withdrew from an 804-megawatt contract. for Connecticut, called Park City Wind, which included jobs and port development in Bridgeport. It also backed out of a 1,200-megawatt contract in Massachusetts called Commonwealth Wind.

In 2019, Connecticut’s legislature authorized the state to purchase up to 2,000 megawatts of offshore wind power. Park City had been the first purchase toward that goal. Its cancellation left the state at zero, where it remains.

An earlier offshore wind project, Revolution Wind, had been approved earlier and is under construction. It will supply 300 megawatts to Connecticut and 400 to Rhode Island.

Avangrid put its projects out to bid again, presumably at higher prices, in the multi-state solicitation in March of this year. Park City was renamed New England Wind 1. Commonwealth is now New England Wind 2. Avangrid continued to work on them all along, and New England Wind 1, the former Park City, is fully permitted and far more advanced than any other project in the bidding group.

Surprisingly, Massachusetts, not Connecticut, chose that project, which now has 791 MW. It is unclear whether the Bridgeport development component remains. It also chose 800 MW of a 1,200 MW project called Vineyard Wind 2 and 1,087 MW of a project called South Coast Wind, also a re-bid project. Rhode Island opted for the remaining 200 MW of South Coast.

What remains, aside from New England Wind 2 (which will likely be rebid in an upcoming call for bids) and the remainder of Vineyard Wind 2, is the entirety of one project called Starboard Wind. It is an Ørsted project, proposed with 1,184 MW specifically for Connecticut or Rhode Island, or a joint venture. The project would use State Pier in New London for assembly and construction.

Wind turbine towers line the Connecticut State Harbor in New London. Credit: Mark Mirko / Connecticut Public

Ørsted owns the dock and is already responsible for assembly and delivery operations for three offshore wind projects: Revolution, Sunrise Wind in New York and the already completed and operational South Fork Wind 35 miles off the eastern tip of Montauk Point on Long Island.

But it is the remaining 400 MW of Vineyard Wind 2 that could threaten the hitherto synchronized and friendly energy relationship between the New England states, especially the two largest energy users: Massachusetts and Connecticut.

A somewhat ominous statement on Vineyard Offshore’s website casts doubt on the project’s viability if no state takes over the rest of the power. That could wipe out about 30% of Massachusetts’s commitment and point the finger squarely at Connecticut.

The release reads: “Vineyard Offshore congratulates Governor Healey and the Commonwealth of Massachusetts on their commitment to acquire up to 800 megawatts of our 1,200-megawatt Vineyard Wind 2 project, which provides the opportunity to deploy New England’s next-generation offshore wind project,” said Vineyard Offshore CEO Alicia Barton. “We look forward to Connecticut’s upcoming decision on the remainder of the acquisition so we can begin delivering significant economic and climate benefits to the region.”

Vineyard Offshore did not respond to a request for additional comment, but those familiar with the project say this is no idle threat.

“I think Governor Healey is looking for a partner. I think she had reason to expect that she would have one,” Steinberg said. “Everything that the New England states have been talking about incorporates offshore wind as a major component. I’m disappointed with the governor’s position right now. I don’t think it’s constructive.”

But he and others believe the governor has time to make a decision, given that these projects are years away, developers are still working on them even without buyers for the energy and given that the financial landscape may be about to change with widespread expectations that the Federal Reserve will lower interest rates at its next meeting this month.

On the other hand, Donald Trump hates offshore wind energy, and his first administration delayed its development for four years. If he comes back to power, a similar scenario is very likely to occur.

“I don’t know what the plan is, but we could get those 400 megawatts and there’s no particular urgency for us to make that decision yesterday,” Rothenberger said. “If Connecticut didn’t choose any projects from this latest round, it would be very disappointing… It would seem to indicate a real lack of awareness of the benefits of these projects to Connecticut residents, which I know the administration has.”

As for the governor himself, when asked when he might decide whether to pursue offshore wind: “I’m cautious about that, as you know,” he said. “Not for a while.”

Mark Pazniokas contributed reporting.

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