Avangrid Renewables and Copenhagen Infrastructure Partners (CIP) are restructuring their Vineyard Wind joint venture.
Vineyard Wind has successfully built a portfolio that includes Vineyard Wind 1, the first commercial-scale offshore wind project in U.S. waters. The 800 MW project reached financial close last week and is beginning construction this month. It will begin delivering energy to Massachusetts beginning in 2023.
Vineyard Wind 1 will continue to be developed as a 50/50 joint venture between the partners. Avangrid Renewables will have an option to gain operational control once the project reaches commercial operation. Avangrid Renewables will take full ownership of lease area OCS-A 0534, which includes Park City Wind, an 804 MW project which will deliver energy to Connecticut, and Commonwealth Wind, which last week submitted a bid for up to 1,200 MW to the third Massachusetts offshore wind competitive solicitation.
CIP will take full ownership of lease area OCS-A 0522, the easternmost offshore wind area, which has the potential to deliver over 2,500 MW of energy into New England and New York.
“Along with Avangrid Renewables, we have during the previous week achieved the most important milestone for offshore wind in the U.S., and with our partner are excited to lead Vineyard Wind 1 through the construction phase and complete this trailblazing project,” says Christian T. Skakkebæk, senior partner in CIP. “Lease area 522 has the highest wind speed of any lease area in the northeast and will be a very competitive site for solicitations from New York to Massachusetts.”
“We are proud of the extraordinary accomplishments achieved in partnership with CIP, including the first commercial-scale offshore wind farm in the United States,” mentions Dennis V. Arriola, CEO of AVANGRID. “We look forward to continuing our partnership with CIP for Vineyard Wind 1 as well as leading Park City Wind and Commonwealth Wind to deliver economic opportunity and clean energy to New England.”
Once the restructuring is finalized, Avangrid Renewables will make a net payment of $167.5 million in order to acquire 100% of OCS-A 534 containing Park City Wind and Commonwealth Wind. In exchange, CIP will acquire 100% of OCS-A 522. The transaction is subject to consents from key stakeholders and regulators, which include the Bureau of Ocean Energy Management (BOEM) as well as the Connecticut electric distribution companies. The transaction is expected to close in approximately six months during which the parties have agreed on a transition plan.