Vineyard Wind Setback, Huge Indian Renewables Investment

Connecticut and Massachusetts have backed out of their portions of the Vineyard Wind 2 offshore project, Avaada Group is investing $12B in renewables for Rajasthan by 2030, and Enersense is selling its onshore wind and solar project development business to Fortum.

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Welcome to Uptime News Flash. Industry news, lightning fast. Your hosts, Allen Hall, Joel Saxum, and Phil Totaro discuss the latest deals, mergers, and alliances that will shape the future of wind power. News Flash is brought to you by IntelStor. For market intelligence that generates revenue, visit www.intelstor.com.

Allen Hall: There’s been a significant setback for offshore wind development from Vineyard Offshore as they announced the withdrawal of its 800 megawatt portion of the Vineyard Wind 2 project from Massachusetts contract negotiations and that decision came after Connecticut opted not to purchase its planned 400 megawatt share of the project.

This development impacts Massachusetts ambitious offshore wind goals, where despite earlier procurement of 3200 megawatts of capacity, only Vineyard Wind 1 remains active in the state’s pipeline. And Phil, this is due to the combination of Massachusetts, Connecticut, and Rhode Island working together to draw from some of these offshore projects.

But now, Connecticut is full stop, not going to be involved in offshore wind, they said, for at least a couple of years.

Phil Totaro: Yeah, not that Connecticut has always been Wind Energy’s biggest well, biggest fan, pardon the pun. Connecticut has, is basically saying that they’re pulling out of this procurement because offshore wind is just too expensive, and that’s entirely true. . Given what the industry has to price the PPA at to be able to pay for the project, given the the cost of money and the cost of equipment these days.

So I can see why they did it, but it does kind of screw Rhode Island and Massachusetts a little bit because, they were counting on that offtake. So the question then becomes, does Massachusetts unilaterally go and sign an agreement 2 at some point?

Is that even something that’s going to be able to move forward, before January 20th, where presumably we’re not going to get, four years worth of BOEM approvals on offshore wind farms? So there’s a lot of uncertainty and unfortunately chaos caused by, Connecticut’s decision here and, and certainly unfortunate for, for vineyard offshore wind.

Joel Saxum: I think one thing to think about here is that like you said, Phil, that there’s a looming deadline that might close the door on some of these wind things or not, not slam the door, but close it a little bit more this offshore wind program that we have going on the East Coast for no matter what state you’re in.

And, and the way I’m looking at some of this is, yes, the PPAs are expensive. I see that. Tech, the technology is expensive. I see that the financing is, has been a bit difficult. It should be hopefully getting easier to see that. However, If your goal is to have renewable energies and you’re in the northeast part of the United States, you don’t have a whole lot of options.

Your options basically are offshore wind and something else that someone dreams up for something because that’s it. So if you have renewable energy goals and you’re those states, rather than canceling things or doing things of this sort, I would just love to see more people at the at the table having transparent conversations.

Allen Hall: India’s renewable energy sector is receiving a massive boost as Avaada Group commits to invest 12 billion U. S. dollars in Rajasthan by 2030. The ambitious plan aims to transform the northwestern state into a global renewable energy center. Energy powerhouse. Now the investment will fund several initiatives including a 1.

2 gigawatt pump storage project, green hydrogen and ammonia facilities and utility scale solar and wind power sites across four cities. Now Phil, the development of renewable energy in India is growing at a massive pace but also some old technology, coal factories, gas burning technology still exists there.

Where is the future for India?

Phil Totaro: They’re actually making a fairly rapid transition to wind and solar that has been accelerating over the past few years and Avada group has a plan to get 30 gigawatts by 2030 just by themselves as a company. That’s a, a lot of like countries or maybe states might have that kind of a target elsewhere in the world, but this is just one company saying, we’re gonna get to 30 gigawatts by 2030 and, and in this case spend, 12 billion plus , to be able to get there, obviously the 12 billion isn’t gonna pay for the whole thing, just to be clear.

It’s, it’s one tranche of money that they’re setting aside for for this, but they already have a portfolio of something around four gigawatts worth of wind and solar and a little, a tiny bit of battery storage. But it’s, it’s going to be a tremendous amount of growth in India that has been talked about for more than a decade and is finally, finally coming to fruition with investments like this.

Joel Saxum: Allen and I kind of live this story every day. We’re talking with a lot of wind operators in India, and you just see growth, growth, growth, new turbines, new turbines, new turbines left and right. To add to that, one of the lar or the largest renewable energy park in the world is going to be in the north of India.

West corner of India as well. It’s called the Kavda Renewable Energy Park. And that thing’s going to be 30 gigawatts just in itself. Now that’s solar and wind combined of course. But that’s, that’s planned. So the plans are there. The, the money’s flowing. We’re seeing development. I think it’s fantastic for India to fast forward their economy that way as well.

So kudos to them.

Allen Hall: Finnish energy services provider Enersense International is selling its onshore wind and solar project development business to Fortum in a strategic shift. The deal valued at 9. 5 million euros with the potential future earn out up to 74 million euros includes a 2. 6 gigawatt onshore wind generator.

Development pipeline. Now this transaction aligned with Intersense’s June decision to abandon its zero emission energy producer ambitions. Phil, what’s behind the Intersense decision to get out of clean energy?

Phil Totaro: Well, they’re not necessarily getting out of clean energy. They’re getting out of the clean energy development project development process. And considering the fact that they’re mostly a financial investment vehicle as, as a company that makes sense. It’s however, a bit confusing. I mean, I can see why they would partner with Fortum.

It’s also a bit curious because Fortum makes somewhat dubious decisions as far as, who they partner with and their investments and whatnot. And yet it Intersense to be able to divest, the, the early stage, particularly project development and portfolio and pipeline and capabilities since it’s not their core competency.

It does give them the opportunity to buy back into projects that, Fortum would build. And then if they want to be the owner and, and hire someone on to be the operator, then they can they can continue to do that. But I think again, this is about alignment with their core competency. I think that’s the general sense I get from this, this deal.

Joel Saxum: Yeah, I agree with Phil. I think it’s just smart business, right? If you’re good at one thing, stay being good at it. Stay being that financial advisor or that financial services vehicle to get things going. We see a lot of divestment in pipelines and a lot of divestment in active assets. Doing them at certain stages just makes sense financially.

So, doing this, Enersense gets back to their core competencies, like Phil said, and Fortum gets to, further their goals. One of their goals is to develop at least 800 megawatts of shovel ready onshore wind and solar projects by the end of 2026. And with this deal closing in the first quarter of 2025, it’ll help them out.