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OSW Transmission: Massachusetts explores competitive route [free access]

April 10, 2020

The offshore wind transmission industry is keenly watching the developments in Massachusetts. The state, which aims to achieve 3.2GW offshore wind (OSW) capacity by 2035, holds the promise of carrying out a separate solicitation for independent offshore transmission system before the next OSW solicitation slated for 2022. Massachusetts Department of Energy Resources (DOER), in association with Massachusetts Clean Energy Centre (MassCEC), is in gathering industry feedback to explore whether it should solicit proposals for a coordinated independent transmission network for the proposed offshore wind projects.

 

Meanwhile, Anbaric Development Partners (Anbaric), a private large-scale transmission and storage solutions developer involving partners Anbaric and Ontario Teachers’ Pension Plan (OTPP), is in the process of getting approvals for high voltage direct current (HVDC) merchant offshore transmission lines (OceanGrid project) to connect future offshore wind farms to the onshore grid in Massachusetts.

 

Developments so far

 

The Act to Promote Energy Diversity 2016 (under Section 83C) requires the state’s EDCs — Eversource Energy, National Grid plc and Unitil Corporation — to enter into 15-20 year contracts to procure up to 1,600 MW offshore wind by June 30, 2027.

 

Subsequently in 2018, the Act to Advance Clean Energy passed in August 2018 doubled the target to 3,200 MW to be achieved by 2035. It also allows DOER to authorise the EDCs to solicit and procure independent offshore wind transmission.

 

Following its publication of the Offshore Wind Study (May 2019), DOER authorised the solicitation and procurement of 1,600 MW of offshore wind. The study recommends the state EDCs to proceed with an additional 1,600 MW offshore wind generation solicitations between 2022 and 2024. It also suggests that a separate solicitation for an independent transmission system (against single package with offshore wind generation) may take place in 2020 before the OSW solicitation in 2022. This will enable future generation projects to tie into a main offshore transmission system. The DOER is now in the process of investigating the transmission option.

 

As per Section 83C of the 2016 law, DOER and the utilities issued the first long-term contracts for OSW energy in 2017. Thereafter, the state selected two projects across two solicitations— 800 MW Vineyard wind project in May 2018 and 804 MW Mayflower wind project in October 2019. While the former project will be commissioned by 2022, the latter will be completed in 2025.

 

The tender for the first OSWs included offshore transmission bids. Under the 83C round 1 solicitation, interested developers were required to submit two bids for transmission – generator lead line (GLL) bid and an expandable transmission network (ETN) bid. The ETNs were intended to create an open access offshore transmission network to which multiple offshore wind developers would be able to interconnect. The evaluation team developed a methodology that assigned costs and benefits to the ETN proposals including stranded cost risks. However, the selected Vineyard Wind project included GLL transmission only.

 

Under the 83C round 2 solicitation, there was no ETN requirement. It required two bids to be submitted – GLL bid and a GLL bid with a commitment agreement. The latter is a commitment by the bidder that if a future third-party offshore wind developer requests interconnection with or expansion of the bidder’s interconnection facilities, the bidder will negotiate in good faith and use commercially reasonable best efforts to enter into a voluntary agreement with the third-party developer. The selected Mayflower Wind project includes a commitment agreement.

 

Based on this experience and new requirements, DOER is currently investigating the possible structures of paired solicitations of independent offshore wind transmission followed by offshore wind generation under Section 83C. It is looking for answers to the questions –

 

 

Anbaric’s Massachusetts OceanGrid

 

With the passage of the energy diversity law of 2016, Anbaric proposed its expandable OceanGrid project, which is designed to support at least 2 GW of offshore wind generation located in the Atlantic Ocean off the coast of Massachusetts.

Anbaric’s proposed open access Southern New England OceanGrid project will enable evacuation of offshore wind in the New England wind lease area to the onshore grid. This has two parts viz. Massachusetts OceanGrid and Connecticut OceanGrid. In February 2018, Anbaric received Federal Energy Regulatory Commission (FERC) approval to solicit customers and sell transmission rights to a 2-2.4GW offshore wind transmission system in Southern New England. This allows Anbaric to offer its backbone transmission system to offshore wind developers that currently hold federal leases or future leaseholders.

As per the filing, the project entails the construction of two 1,000-1,200-MW HVDC transmission lines, each running approximately 40-60 miles (64.4-96.6 km) before interconnecting with the ISO-New England’s (ISO-NE) transmission system in southeast Massachusetts. The project includes a 500 MW alternating current (AC) connection between two HVDC offshore platforms. The two offshore platforms will be located up to 25 miles (40.2 km) apart and serve as collection points to integrate offshore wind generation. The platforms will be linked to two separate undersea cables that will transmit the power to the converter stations on the mainland. These substations will convert the DC input into AC power output at 345 kV before it is transmitted to a nearby 345 kV substation. The first HVDC line is expected to be in place by December 2021 with the full system operating by 2025. Once operational, the developers will allow the ISO-NE to control the project and dispatch offshore wind generation to the ISO-NE system.

Having received FERC approval in 2019, Anbaric filed interconnection requests for 1,200 MW HVDC transmission systems in Somerset and Everett, Massachusetts as well as Bridgeport, Connecticut. In November 2019, Anbaric filed an application with the Bureau of Ocean Energy Management (BOEM) for non-exclusive rights to corridors for a transmission system on the outer continental shelf.

Meanwhile, in May 2019, Anabaric announced an agreement with Commercial Development Company Inc. for setting up the USD650 million renewable energy centre at Brayton Point, Somerset, a former coal-fired power plant site. The central element of the centre is an HVDC converter station for 1.2GW of offshore wind (USD250 million) as well as up to 400 MW of battery storage on site (USD400 million).

 

Transmission studies by ISO-NE

 

Meanwhile, ISO-NE (the regional transmission organisation (RTO) serving the five states of Massachusetts, Connecticut, Maine, New Hampshire, Rhode Island, and Vermont) has been undertaking transmission studies for integration of OSW. In response to economic study requests that ISO-NE solicits annually from regional stakeholders annually, in 2019, it received three requests including those from the New England Committee on Electricity (NESCOE) and Anbaric for ascertaining the impact of increasing penetration of offshore wind resources. The NESCOE and Anbaric scenarios are modelling different transmission expansions. The transmission system is being modelled using 2030 internal transmission interface transfer capabilities.

 

Based on the currently expected transmission system by 2030, the ISO anticipates that the following levels of offshore wind addition of about 7 GW have the potential to avoid major additional 345 kV reinforcements. Offshore wind additions over 7 GW would require additional large units to be assumed retires in areas of new injections and/or potential need for significant transmission reinforcements. Offshore wind additions are being modeled to cover areas off the coast of Rhode Island and Southern Massachusetts that are close to the areas that have been auctioned by the BOEM. The final reports of these economic study requests are expected later in 2020.

 

The way forward

 

The offshore wind transmission in Massachusetts is buzzing with activity. DOER is in the process of deciding whether to authorise a separate independent offshore wind transmission solicitation. Anbaric is in the process of getting the requisite permits for its proposed OceanGrid project. Meanwhile, the ISO-NE is conducting studies to ascertain the impact of upcoming OSW across the region on the power system and transmission grid. The year ahead will witness the outcomes of these activities which will determine the future course of offshore wind transmission in Massachusetts as well as in the US. 

 

Offshore wind transmission options

 

Currently, there are three broad options available for offshore wind transmission in Massachusetts – generator lead line (GLL) (single or bundled), merchant line (elective transmission upgrade) and ISO-NE planning.

 

GLL: Developers of generator tie lines have priority rights to the capacity of assets it funded for five years (safe harbour period) from the commercial operation date of the line. This is in line with FERC’s Order 807 passed in March 2015 that provides owners and operators of interconnection customer interconnection facilities (ICIF) a safe harbour of 5 years until the open access transmission tariff (OATT) requirements become applicable. During this period, the eligible ICIF is not required to expand its facilities unless a third party requester has strong evidence against the presumption that the ICIF owner has plans to use all of its capacity.

 

Merchant line: Potential offshore merchant transmission line developers identify and propose to develop a specific project, and bears all costs and risks associated with it. The users of the asset pay negotiated rates to the developer. Here, FERC’s Final Policy Statement on the Allocation of Capacity (2013) allows developers to select a subset of customers, based on not unduly discriminatory criteria and negotiate directly with those customers to reach agreement on key rates, terms and conditions for procuring up to the full amount of capacity when the developers broadly solicit interest from potential customers. In this regard, for merchant lines, FERC’s four-criteria test (Chinook test) evaluates the fairness of rates, potential for undue discrimination or preference as well as regional reliability and operational efficiency.

 

ISO-NE planning: Developers may build offshore transmission projects selected through the regional transmission planning process and cost recovery under ISO-NE OATT. Another method is through the FERC Order 1000 public policy transmission upgrade process. Developers may also follow the interconnection queue process subject to single contingency limitations.

 

Table 1: Massachusetts’ offshore wind goals

Renewable goal

Offshore wind goal (MW)

PPAs awarded (MW)

Future solicitations

35% by 2030

3,200

  • 2018 – 800 MW Vineyard Wind
  • 2019 – 804 MW Mayflower Wind
  • 2022 – 800 MW
  • 2024 – 800 MW

2022 – 800 MW

2024 – 800 MW

Source: DOER; Global Transmission Research

 

Figure 1: Solicitation structures for offshore wind transmission

Note: *ITO – Independent transmission operator

Source: DOER technical conference presentation