New England grid gets $389M boost to help plug in offshore wind

The U.S. Department of Energy awarded $389 million this week to a coalition of New England states for improvements to the power grid that will significantly increase the region’s capacity for offshore wind development.

The Power Up New England plan — a collaboration between Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont, as well as local utilities — will expand and upgrade the shared interconnection points for the undersea cables that bring power from offshore wind farms to the grid. According to DOE, those facilities could allow for more than 4,800 megawatts of wind power to flow into New England, which is enough to power 2 million homes — and significantly more than is currently online in the country.

The funding, released as part of the 2021 Bipartisan Infrastructure Law, will also support the development of a long-term battery storage facility in Maine.

“Having the transmission infrastructure in place to move large amounts of clean energy where it’s needed is a vital component of the region’s clean energy future,” said Matt Kakley, a spokesperson for ISO New England, the region’s grid operator.

The grant, still contingent on matching funds, will help accelerate the energy transition in a region that has staked its future on offshore wind. It also marks a growing trend in New England, and elsewhere on the East Coast, of taking a regional approach to energy and climate issues, instead of tackling these challenges state by state.

“These funds will resolve one of the significant challenges of standing up the offshore wind industry,” Massachusetts Governor Maura Healey (D) said in a statement.

Offshore wind has emerged as a lynchpin in the region’s plans to clean up its power grid while also meeting growing electricity demand. In Massachusetts alone, state law mandates generating 5,600 megawatts of offshore wind power by 2027, and every state in the bloc except New Hampshire has laws requiring some level of emissions reductions.

But the region’s electrical grid is not robust enough to support those efforts. A recent study from ISO New England found that demand for electricity could nearly double by 2050, which would require tens of billions of dollars in transmission upgrades.

“New England is no different from the rest of the country, where we’re projecting [electric] load growth, and we’re seeing the grid not keep up,” Jeremy McDiarmid, managing director at Advanced Energy United, told Canary Media.

The DOE funding comes as Massachusetts, Connecticut, and Rhode Island have banded together to coordinate their bidding processes for new offshore wind projects, in an effort to both scale up the industry and reduce costs for ratepayers. Formalized last year, the agreement, state leaders say, is the first joint-procurement plan of its kind.

Under the agreement, the states include calls for multistate proposals within their usual offshore wind solicitation process. If a joint project is selected, the states involved split both the electricity generated from and the costs of the project, up to the limits of their procurement authority. Spreading costs in this way makes it easier to finance and build larger-scale offshore wind installations.

In the current round of proposals, four developers bid for a cumulative 6,000 megawatts across the three states. That includes four multistate proposals, in addition to individual bids.

“With the three states going in collaboratively, it sends a strong market signal [and increases confidence] … that this region is serious about offshore wind,” Kelt Wilska, offshore wind director for the Environmental League of Massachusetts, told Canary Media.

That market signal is especially critical given the recent struggles in the industry; last year, rising prices and issues with the supply chain led to the cancellation of more than half the contracted projects in the country, according to analysis from the Oceantic Network. Thousands of megawatts’ worth of projects in New England were canceled; in Massachusetts, two of the projects proposed in the joint procurements are rebrands of those canceled projects.

Details of which projects have been selected were supposed to be announced this week, but they were ultimately delayed because of the news of DOE transmission funding, according to the Massachusetts Department of Energy Resources and Rhode Island Energy. The announcements for the next slate of offshore wind projects are now expected next month.

So far, operating as a regional unit appears to be succeeding — and gaining ground. While the DOE funding was awarded to the group of New England states this application period, Massachusetts had unsuccessfully applied in a previous round as an individual state. Additionally, last month the U.S. Environmental Protection Agency awarded the New England Coalition $450 million to increase heat-pump deployment in the region.

“We’re not gonna hit our climate goals independently if we don’t work together, because we have a regional grid,” said Wilska. ​“The states know this.”