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Offshore Wind Procurement Would Boost New London Revenue Share Under Host Community Agreement

  • Host Community Agreement signed between New London, Ørsted, and Eversource
  • City stands to gain more revenue if Connecticut procures energy from offshore wind projects planned by Ørsted and Eversource
  • Agreement resolves disputes over the redevelopment of New London’s State Pier to support offshore wind developments

Summary by Dirk Langeveld

New London stands to gain the most from a joint venture based at State Pier if Connecticut procures energy from its offshore wind developments, according to a Host Community Agreement recently announced between the city, the Danish wind developer Ørsted, and the utility company Eversource.

The agreement guarantees that New London will receive $750,000 each year for seven years, for a total of $5.25 million. If the state procures any offshore wind energy from Eversource and Ørsted, the agreement will extend to 10 years; procurement would also allow payments to increase to up to $1.5 million from year three to year seven. The agreement can also be extended to 10 years if joint venture operations continue.

Such procurement would likely occur as part of Connecticut’s clean energy goals. In 2019, Governor Ned Lamont signed an executive order directing the Department of Energy and Environmental Protection to evaluate pathways to transition the state to a 100 percent renewable energy grid by 2040.

Eversource and Ørsted previously committed to a two-year period at State Pier as part of its planned $157 million redevelopment of State Pier into a modern, heavy-life facility. The redesigned port will specifically support offshore wind turbine staging and assembly, with the potential for the deep water port to cater to a broader range of cargo businesses as well.

The agreement’s seven-year period coincides with the planned timeline for three offshore wind facilities being developed as 50-50 ventures by Ørsted and Eversource. State Pier is expected to support the construction of the following:

  • Revolution Wind, which will be located off Rhode Island, have a 400-megawatt capacity for that state, and a 304-megawatt capacity for Connecticut; construction is expected to start as early as 2023
  • South Fork Wind, a 132-megawatt installation off Montauk Point that may be operational as early as 2023
  • Sunrise Wind, an 880-megawatt installation off Montauk Point that may be operational as early as 2024

“Today’s agreement makes Connecticut’s role as a leader in the offshore wind industry official, with New London now poised to become the premier commercial east coast hub for this sector and our state set to become a leader in the transition to renewable energy and the fight against climate change,” said Governor Ned Lamont.

New London Mayor Michael Passero had long criticized the project, previously saying the developers were not adequately compensating the city for its role as a host community, but expressed support for the agreement. Passero said he anticipates annual revenues of more than $1 million once payments from the Connecticut Port Authority and port operator Gateway Terminal are factored in.

“The city has worked tirelessly to reach an agreement that benefits the taxpayers of New London as the host city for the State Pier’s use for offshore wind development,” he said. “It is exciting for the city to partner with the state on its commitment to increasing clean renewable energy for Connecticut residents, and we look forward to economic growth opportunities for New London and the region as the offshore wind industry continues to grow.”

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