October 4, 2023 — Connecticut’s largest offshore wind project — Park City Wind — is not quite dead in the water but is now on serious life support.
Its developer, Avangrid, announced Monday night that it and Connecticut’s utilities have terminated an agreement for the utilities to buy the power from the project. In doing so, Park City, at 804 megawatts, becomes the third major New England offshore wind project, and the second for Avangrid, to hit the shoals.
The reason for each is the same. The economy has shifted so much since the power purchase agreements, PPAs, were negotiated, that the projects are no longer viable.
Avangrid said in a statement that the “unprecedented economic headwinds facing the industry including record inflation, supply chain disruptions, and sharp interest rate hikes” have “rendered the Park City Wind project unfinanceable under its existing contracts.”
“After exploring all potential solutions to the financial challenges facing the project, and engaging in good-faith and productive discussions with Connecticut state officials regarding these challenges, it is clear the best path forward for Park City Wind is in the termination of the Power Purchase Agreements and a rebid of the project,” the Avangrid statement continued. Avangrid will pay $16 million to terminate the agreement.