HomeMarket NewsNew England States Collaborate for Offshore Wind Projects Amid Challenges in U.S....

New England States Collaborate for Offshore Wind Projects Amid Challenges in U.S. Industry

Actionable Trade Ideas

always free

Wind turbine from aerial view, Drone view at windpark westermeerdijk a windmill farm in the lake IJsselmeer the biggest in the Netherlands,Sustainable development, renewable energy

fokkebok/iStock via Getty Images

Connecticut, Massachusetts, and Rhode Island, three of the New England states, have recently formed a collaborative effort to invite bids for up to 6,000 MW of offshore wind power. This move comes at a time when the U.S. offshore wind industry is facing challenges such as escalating interest rates, equipment costs, and labor expenses that render certain projects uneconomical.

The states aim to attract more competitive bids by requesting developers to offer the same price to each state. This joint effort will also facilitate greater coordination on port and supply chain investments, fostering efficiency in the development of offshore wind projects.

Avangrid (NYSE:AGR), a prominent player in the offshore wind sector, recently canceled power purchase agreements for its planned Park City wind project situated off the coast of Connecticut. However, the company commended the tri-state announcement, describing it as a β€œbold procurement strategy” that addresses the urgency of the situation while providing offshore wind developers an opportunity to leverage economies of scale and generate more competitive bids.

In another development, Massachusetts regulators approved a proposal by SouthCoast Wind to provide approximately $60 million to local power companies like Eversource Energy (NYSE:ES), National Grid (NYSE:NGG), and Unitil (UTL) to terminate contracts associated with providing 1,200 MW of power.

For the three New England states, offshore wind plays a crucial role in achieving their respective net-zero emissions targets. Massachusetts plans to sign contracts for 5,600 MW of offshore wind by 2027, Connecticut aims for 2,000 MW by 2040, and Rhode Island is seeking 1,000 MW of offshore wind capacity by 2033.

Investors interested in the offshore wind sector may consider exploring the First Trust Global Wind Energy ETF (FAN) as a potential investment opportunity.

Swing Trading Ideas and Market Commentary

Need some new swing ideas? Get free weekly swing ideas and market commentary from Jonathan Bernstein here: Swing Trading.

Explore More

Weekly In-Depth Market Analysis and Actionable Trade Ideas

Get institutional-level analysis and trade ideas to take your trading to the next level, sign up for free and become apart of the community.