Massachusetts Offshore Wind Bids: An Analysis of the Public Versions

The public versions of the bids in response to the Massachusetts 83C II RFP for offshore wind were released late Wednesday, September 4th. Three of four developers with offshore wind lease rights off the shores of Massachusetts submitted bids. They are Bay State Wind (a partnership of Ørsted and Eversource), Vineyard Wind (a partnership of CIP and Avengrid), and Mayflower Wind (a partnership of Shell and EDP Renewables). This leaves Equinor as the only developer with nearby lease rights not to submit a bid. The heavily redacted bids are quite lengthy, but the Offshore Wind Economics Project has read through them so that you don’t have to. We paid special attention to issues related to local economic development. If you are interested primarily in fishing and wildlife impacts, well, you’re both in and out of luck. You’re out of luck because they only get a cursory treatment here, but you’re in luck because these are the least redacted portions of the bids. It seems like the offshore wind developers are more than happy to brag about all of the things they are doing to engage the fishing community and prevent harmful environmental impacts. That makes sense, given that disseminating this information is a major part of improving public relations and that information related to supply chain development is a commercially sensitive part of business strategy. Anyway, let’s get into it.

Bid Strategy

The RFP required bidders to submit at least one proposal for 400 MW. Developers were allowed to submit additional bids for anywhere from 200 to 800 MW. The original enabling legislation mandated that for each round of offshore wind procurement (except the first), the cost must come in lower than for previous procurements. Given the looming expiration of the Business Energy Investment Tax Credit (ITC) and the very low price in Vineyard Wind’s winning bid in 2018, it was determined that future bids could be for higher amounts, provided that the increased cost was accounted for and justified. Massachusetts is somewhat unique among states procuring offshore wind in that their bid evaluation process is driven almost entirely by cost. However, there is mounting pressure to take local economic development effects into consideration.[1] These two factors (the ability to justify a higher cost and pressure to take steps to increase local content) have resulted in some developers offering a buffet of options, ranging from strictly low cost offerings to options with additional spending to support infrastructure and supply chain investments.

  • Bay State Wind offered two proposals: a 400 MW proposal as required and an “alternative bid.” Bay State was extremely guarded of their bid strategy, even redacting the megawatt size of the alternative option.
  • Vineyard Wind offered three options: a 400 MW proposal, a low cost 800 MW proposal, and an “enhanced local content” version of the 800 MW proposal.
  • Mayflower Wind provided four options: a 408 MW proposal and three 804 MW proposals. (Since 12 divides evenly into 408 and 804, perhaps they intend to use the 12 MW GE Haliade-X Turbine?). The three 804 proposals consist of a “Low Cost Energy” proposal at a price they assert will come in lower than any other offshore wind farm; an “Infrastructure and Innovation” proposal, which includes “strategic investments in port infrastructure, technology, and innovation;” and a “Massachusetts Manufacturing” proposal, which builds on the Infrastructure and Innovation proposals by adding on an investment in a new wind tower manufacturing facility somewhere in Massachusetts.

Staging and O&M Locations

It is now generally accepted knowledge that developing offshore wind in the United States will require a network of ports since no one location is ideal for supporting the full range of activities.[2] Furthermore, a lot more space is needed to support the full needs of the industry, with multiple large scale projects slated to be built in the coming years. Therefore, while it is likely that all three bidders are considering the New Bedford Marine Commerce Terminal, it is also likely that they have additional locations in mind. Indeed, investments are already being made in other ports, such as Brayton Point in Somerset, MA[3] and New London, CT.[4]

  • Bay State Wind: Details on the locations of staging and O&M were redacted.
  • Vineyard Wind: While many details were redacted, it was revealed that in the “Enhanced Local Content” scenario, they intend to invest $14 million in Brayton Point for port and facility improvements to enable secondary steel fabrication and the final outfitting of transition pieces, plus up to another $5 million enable the final outfitting and coating of the offshore substation. The location of the O&M base was redacted, but the bid admits that there will be some “operational efficiencies” from their first wind farm Vineyard Wind I.
  • Mayflower Wind: The location of their staging port was redacted. They said they will use a Massachusetts-based port for O&M and that 75% of O&M jobs will be located in the Commonwealth. It appears they intend to use a Service Operational Vessel (SOV) in addition to some Crew Transfer Vessels (CTVs).

Local Manufacturing

The pipeline of offshore wind projects has grown to the point at which we can expect some manufacturing of the primary components to move to the United States. Developers have limited control over the business decisions of the OEMs (original equipment manufacturers), but pressure from states to present high economic development impacts in bid proposals may incent developers to flesh out a deal in advance of submitting a bid.

  • Bay State Wind: Details on local manufacturing were redacted.
  • Vineyard Wind: While many details were redacted, it was revealed that they intend to source secondary steel materials locally.
  • Mayflower Wind: As a key feature of their “Massachusetts Manufacturing” 804 MW proposal, Mayflower Wind has promised to work with Marmen Inc. to locate a tower manufacturing in an Economically Distressed Area in Massachusetts.

Transmission and Storage

It appears that all three developers intend to use the “generator lead line” model of offshore wind transmission, in which the developer that wins the contract is also responsible for building the transmission system. This may change in future bids since the most recent Massachusetts offshore wind legislation permits separate proposals for transmission and generation and companies such as Anbaric Development Partners have been actively showing their interest in securing that business.

It appears that they are also in agreement on forgoing electricity storage. Bay State Wind and Vineyard Wind both redacted these sections, but the sections themselves are so short that it’s hard to imagine that they could contain much more than “sorry, not this time.” Mayflower left this section public, stating that electricity storage does not yet make economic sense. They cite data from Bloomberg New Energy Finance, which shows that the Levelized Cost of Electricity (LCOE) of battery storage has been declining rapidly, but is still twice as expensive as offshore wind.[5]

Other Investments in Economic Development

For the first round of bidding, Bay State Wind actively promoted the investments they intended to make in local economic development, but this time they were much more reserved. Vineyard Wind was mostly consistent, in both cases not calling attention to their planned investments in the media, but keeping some details unredacted in the bid. One big change on the part of Vineyard Wind is that this time around they redacted the estimated job and economic impacts. Newcomer Mayflower Wind seems eager to stand out in the crowd and has made their interest in promoting local economic development known in a press release and has left some details unredacted.[6]

  • Bay State Wind: Details on investments and economic development impacts were redacted.
  • Vineyard Wind: Most details were redacted, but it was left public that both proposals include $12 million in direct funding for supply chain, workforce development, and low-income ratepayer initiatives.
  • Mayflower Wind: While they did not provide dollar amounts, Shell touted investments for “expanding South Coast ports” (someone should let them know that locals spell it Southcoast or SouthCoast), a Massachusetts Clean Energy Center (MassCEC)-administered Offshore Wind Accelerator to foster innovation through “efforts and institutions like New Bedford Ocean Cluster, SeaAhead, and Greetown Labs,” MassCEC-administered training grants, and funding for marine science. Mayflower was the only company that did not redact the job impacts, claiming 10,680 jobs will be created in Massachusetts, including indirect and induced impacts. There are two problems with this number. (1) These are actually FTE job years, but in some cases they report them as individual jobs. To accurately count the number of jobs in Operations & Maintenance, for example, you would need to divide the job count by the approximately 25 years the wind farm is in operation. (2) Even correcting for the fact that these are job years and not individual jobs, this number is implausible. OSWEP rigorously assessed the job impacts of a similar proposal that we vetted through agreements with supply chain partners and came up with just over 3,658 FTE job years.[7] (This did include indirect and induced impacts and the possibility of tower manufacturing.)[8] How can Mayflower be putting forth a lower price while also creating almost three times as many job years? The biggest area of discrepancy with our analysis is in the operations phase, where they claim 4,350 direct FTE job years. On an annual basis, O&M supports about 80 direct year-round jobs (not including supply chain impacts). If they hire the standard size crew, the wind farm would have to be in operation for about 55 years to create the 4,350 jobs years purported by Mayflower. The standard rule of thumb is currently about 25 years.

Fishing Interests

All three developers left public many details about their efforts to engage the fishing community and minimize the potential impacts to the fishing industry. Interestingly, it now appears that Bay State Wind and Vineyard Wind are in agreement to orient the rows of turbines in an East to West layout. (This was previously a major point of contention between developers and different fisheries.)[9] Other measures made public by developers include burying the subsea cables in such a manner as to prevent interaction with fishing equipment and compensation for gear loss.








[8]  See Vineyard Wind Proposal Attachment 14 for supply chain letter of support from Ventower.


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