Avangrid, Iberdrola's subsidiary in the United States, has pulled the plug on its purchase of PNM Resources, which it finally abandoned last Sunday. And he has achieved this with the commissioning of one of his most important projects: the Vineyard Wind offshore wind farm on the New England coast in the northeast of the United States. The group led by Ignacio Sánchez Galán owns 50% of the park together with Copenhagen Infrastructure Partners (CIP).
The Avangrid plant and another commissioned last month off the coast of New York, developed by the Danish company Ørsted for the American power company Eversource, are the first two large offshore wind farms to be used to power the United States states begin. The sector has, on the one hand, taken advantage of the renewable energy incentives promoted by the administration of Joe Biden, but on the other hand, it has suffered setbacks due to increased commodity prices, rising interest rates and problems in the economic supply chain, which have led to the termination of some contracts.
“2023 was a historic year for offshore wind, with steel in the water and people at work. Today, we begin a new chapter and welcome 2024 by adding the first clean offshore wind energy to the Massachusetts grid,” Avangrid CEO Pedro Azagra said in a statement. “We have reached a defining moment for climate action in the United States and a beginning for the American offshore wind industry,” he emphasized.
“This is a historic moment for America’s offshore wind industry,” said Massachusetts Governor Maura Healey. “Looking forward, Massachusetts is moving toward energy independence thanks to our nation-leading work to build the offshore wind industry,” he added.
The commissioning has so far taken place on a small scale. As part of the initial commissioning, a turbine delivered around five megawatts of power on Tuesday, January 2, 2024 at 11:52 p.m., and further tests both on land and at sea are expected in the coming weeks. The project hopes to soon have five turbines operating at full capacity.
Power from the projects connects to the New England grid in Barnstable and is transmitted via underground cables that connect to a substation further inland on Cape Cod. Once completed, the project, located approximately 15 miles (25 kilometers) off the coast of Martha's Vineyard, will consist of 62 wind turbines that will generate 806 megawatts (MW), enough to power more than 400,000 homes and businesses in Massachusetts.
According to Avangrid, the park will create 3,600 full-time equivalent jobs, save customers $1.4 billion in the first 20 years of operation and is expected to reduce carbon emissions by more than 1.6 million tons per year, equivalent to the elimination of 325,000 cars corresponds annually from circulation.
Terminated contracts
In addition to 50% of Vineyard Wind, Avangrid owns 100% of Commonwealth Wind (1,200 MW in Massachusetts) and Park City Wind (804 MW in Connecticut), two of the most advanced offshore wind projects in the United States. In addition, the Kitty Hawk Wind company, which has the potential to deliver 3,500 megawatts to Virginia and North Carolina, is developing enough energy to power one million homes and businesses in the region. The company has stated since 2022 that it is looking for partners for these projects, but the complicated environment makes it difficult to set up.
Avangrid agreed last summer to pay $48 million (about 44 million euros at current exchange rates) to break the energy marketing agreements of Commonwealth Wind, its project for the largest offshore wind farm in New England at 1,200 megawatts and an investment of 4,000 million dollars. The company considered that the project was not economical under the originally agreed terms and demanded a renegotiation of the contracts, but the electricity distributors closed completely.
Similar terminations of contracts by other companies also occurred in other states such as Connecticut and New Jersey. On the same Wednesday, Norway's Equinor and Britain's BP broke their agreement to sell energy from their Empire Wind 2 offshore wind farm to the state of New York, citing rising inflation, rising interest rates and there are problems with the supply chain.
“Commercial viability is critical for ambitious projects of this size and scale. Choosing Empire Wind 2 provides an opportunity to refocus and develop a stronger and more resilient project for the future,” Molly Morris, president of Equinor Renewables America, said in a statement.
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