Shell-Ocean Winds JV: ‘Mayflower Wind Did Not State Project Was Not Viable’. Developer Plans to Testify in Rhode Island

Mayflower Wind, the joint venture (JV) between Shell and Ocean Winds, said that it did not state that its offshore wind project in Massachusetts was no longer viable and intends to testify to the project’s viability before the Energy Facility Siting Board (EFSB) in Rhode Island, where part of the offshore wind farm’s transmission corridor is planned to be constructed.

• The project is viable and progressing in its development despite challenges, Mayflower Wind says
• The developer intends to provide testimony in Rhode Island, as requested by the state’s EFSB

The company said this in a letter sent through its legal representative to Robert Shea, Presiding Officer of the Energy Facilities Siting Board in Massachusetts, on 18 November.

“Mayflower Wind did not state that its Clean Energy Resource or its necessary transmission connector projects were not viable, but raised reasonable concerns about the economics of the projects in light of extraordinary inflation and supply chain issues affecting the offshore wind industry, and expressed a desire for the parties to the PPAs to examine those concerns”, the company states in the letter.

Mayflower’s move comes following the case in Massachusetts where Commonwealth Wind (Avangrid) had requested a one-month pause in the review of its power purchase agreements (PPAs) at the Department of Public Utilities (DPU) so they could be revised and renegotiated.

Mayflower Wind joined Commonwealth Wind in the motion a week later.

The DPU denied the motions and requested the developers to either continue with the PPAs undergoing review and approval proceedings at the DPU, or to file a motion to dismiss the proceedings, with both developers deciding to continue and withdrawing their motions.

In its initial request and subsequent submissions to the DPU, Commonwealth Wind cited unfavourable global economic conditions as the reason behind the request, and said its project was no longer viable and would not be able to move forward under the conditions in the PPAs it signed earlier this year with the state’s three electric distribution companies.

Mayflower Wind reiterated what Avangrid stated with regard to macroeconomic and supply chain challenges affecting the projects. However, the developer now highlighted that Mayflower Wind did not state in its submissions to the DPU that its project was no longer viable.

The joint venture’s letter was sent to the Massachusetts EFSB shortly after the Rhode Island EFSB – with which Mayflower Wind filed an application for part of the project’s cable route – requested Mayflower Wind to show cause why the proceedings for its application should not be suspended.

Rhode Island’s EFSB issued an order on 10 November, after concerns were raised on the project’s viability following the submissions in Massachusetts and media coverage relating to the case.

Mayflower Wind has requested Rhode Island EFSB to extend the ten-day period to appear before the Board to show cause.

According to the order in Rhode Island, if the developer does not show cause to continue the application proceedings, they would be suspended until the Massachusetts DPU issues final orders on the applicable pending PPAs and amendments, and the developer testifies to prove its offshore wind project is economically and financially viable under the pricing and conditions of its PPAs approved in Massachusetts.

In its letter to the Massachusetts EFSB, Mayflower Wind states that its offshore wind project “is viable and progressing in its development despite challenges caused by extraordinary global macroeconomic conditions” and that the developer was fully committed to the development and permitting of the offshore wind farm and its necessary transmission connector projects.

Mayflower Wind also emphasised that it was moving forward with approval of its PPAs in both the 83C II and 83C III proceedings – the former being for the first, 804 MW Mayflower Wind project for which the Massachusetts DPU approved the PPAs in November 2020, and the latter being the second, 405 MW Mayflower Wind project which signed PPAs this April. 

Mayflower Wind, which later merged the two projects into one development now known as the SouthCoast Project, had filed a motion for a one-month suspension of the PPA amendment proceedings for the first project, as well, for the same reasons as for the second project.

In the letter withdrawing its motion and notifying the DPU of its decision to continue under the ongoing PPA proceedings, the developer reiterated that the “significant changes in global supply and macroeconomics” are affecting the project and said that Mayflower Wind will provide the electric distribution companies and the DPU with “detailed third-party analysis demonstrating challenges to financeability, with the goal of finding solutions that provide value to the rate payers”.

“Again, in these pleadings Mayflower Wind did not assert that its projects were not viable, but instead raised reasonable concerns about their economics in light of current conditions”, Mayflower Wind stressed in its letter to the EFSB on 18 November.

Located south of Martha’s Vineyard and Nantucket, the Mayflower Wind lease area has the potential to supply 2,400 MW of clean energy to electricity customers in New England, according to the Shell-Ocean Winds joint venture.

Subject to future investment decision, once the first 1.2 GW within the SouthCoast Project (the two Mayflower Wind offshore wind farms) are operational in the late-2020s, they will produce enough electricity to power nearly half a million homes annually and eliminate 13 million tonnes of greenhouse gases over the life of the project.

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