Iberdrola asks to cancel the contracts of its star plan for 3,800 million offshore wind power in the US |  Economy

Iberdrola asks to cancel the contracts of its star plan for 3,800 million offshore wind power in the US | Economy

Avangrid's Gala Solar photovoltaic power plant, outside Prineville, Oregon, in an image provided by the company.
Avangrid’s Gala Solar photovoltaic power plant, outside Prineville, Oregon, in an image provided by the company.

Avangrid, Iberdrola’s subsidiary in the United States, has asked to discard the current marketing agreements for its star plan for Commonwealth Wind, its project for the largest offshore wind farm in New England, with 1,232 megawatts and an investment of 4,000 million dollars ( about 3,800 million euros, at the current exchange rate). The company considered that the project was not economically viable under the agreed conditions and asked to renegotiate the contracts, but the electricity distributors have closed band. Now, he asks to turn the page and offer the energy of the park in the call scheduled for April 23.

The company was awarded long-term agreements (PPAs) late last year to trade future power produced by Commonwealth Wind. In October, it registered a motion with the Massachusetts Department of Public Services (DPU) in which it requested a one-month suspension in the review procedures of those contracts with the electricity distribution companies, as reported by EL PAÍS. The distribution companies that signed the long-term contracts are subsidiaries in the area of ​​the Eversource, National Grid and Unitil groups, which have not wanted to renegotiate. “Avangrid has been disappointed by the refusal of the electricity distribution companies to immediately commit themselves in this matter,” it said in a statement.

”In order to move this project forward as quickly as possible, Avangrid has today filed a motion with the Departments of Public Utilities to dismiss Commonwealth Wind’s contract review, allowing all parties the opportunity to pursue an expedited path forward. , opening the way for the inclusion of the 1,200 megawatts in the next tender for offshore wind energy scheduled for April 2023”, the company explained. The company has committed to submit Commonwealth Wind’s bid in that tender.

The Iberdrola subsidiary alleges that the signed contracts are unfeasible given the unprecedented increases in the prices of raw materials, the rise in interest rates and the problems in the supply chain. Avangrid wants to go ahead with the project through new marketing contracts and continues to work on obtaining the permits and the development of the park and its intention would be to negotiate new contracts in the next call for it, scheduled for April 23.

In its October suspension request, Commonwealth Wind LLC, the company developing the project, had already warned that the projected cost had increased significantly. “Consequently, the project has ceased to be viable and will not be able to proceed if the PPAs are not modified,” he said then.

Iberdrola intends to incorporate partners in this project, as it has done with the 800 megawatt Vineyard Wind 1 offshore wind farm, in which Copenhagen Infrastructure Partners (CIP) has a 50% stake, but that is not possible with a project non-viable.

As Iberdrola argued when winning the contracts, the 1,232-megawatt project will create the equivalent of 11,000 full-time jobs over the life of the project and will generate enough power to supply 750,000 homes. Commonwealth Wind includes two innovative initiatives that transform former coal-fired power plants into clean energy hubs. In Brayton Point (Somerset) the first submarine cable factory in Massachusetts will be installed, operated by Prysmian, and in Salem Harbor a new terminal for wind-offshore projects will be built, which will serve the Park City Wind projects (a wind farm 800 megawatts in Connecticut) and Commonwealth Wind itself.

The contracts affected the purchase of energy from Iberdrola’s offshore wind farm, Commonwealth Wind, and also Mayflower Wind, promoted by the Anglo-Dutch oil company Shell and by Ocean Winds, an alliance between the Portuguese electric company EDP Renovables and the French company Engie.

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