Iberdrola asks to review the conditions of an offshore wind 'megaproject' in the US due to its economic viability

MADRID, 24 Oct.

Iberdrola asks to review the conditions of an offshore wind 'megaproject' in the US due to its economic viability


Avangrid, the US subsidiary of Iberdrola, has filed a motion with the Massachusetts Department of Public Utilities requesting a one-month suspension of power purchase agreements (PPAs) for its offshore wind project 'Commonwealth Wind', to proceed with the evaluation of "the measures that would return the project to economic viability" in the current context.

'Commowealth Wind', which is scheduled to be developed in the waters of Massachusetts, is one of the large offshore wind projects of the Iberdrola subsidiary in the United States, with a planned investment of 4,000 million dollars (about 4,072 million euros) for an installed capacity of 1,232 megawatts (MW).

In a statement, the energy company supported this decision as a response "to the unprecedented economic challenges that all large infrastructure projects face, including the historical increases in prices of global basic products, sharp and sudden increases in interest rates, restrictions in the supply chain and persistent inflation.

Avangrid stressed that the 'Commonwealth Wind' project "remains the best possible solution for Massachusetts to achieve its ambitious climate and clean energy goals" and highlighted that, "despite historic global headwinds, the project is well positioned to reach commercial operations by 2028 and help the state achieve its 2030 emissions reduction goal."

At the end of last year, Iberdrola was awarded the supply of the 'Commonwealth Wind' offshore wind farm in the United States. The project, which will have a capacity of 1,232 megawatts (MW), is expected to create 11,000 jobs and supply 750,000 homes, according to Iberdrola's calculations.

'Commonwealth Wind' includes two innovative initiatives to transform old coal-fired power plants into clean energy hubs. The first submarine cable factory in Massachusetts, operated by Prysmian, will be installed in Brayton Point (Somerset), and a new terminal for offshore wind projects will be built in Salem Harbor, which will serve the 'Park City Wind' and 'Commonwealth Wind'.

Massachusetts plans to have four gigawatts (GW) of contracted offshore wind capacity in 2027 and 5.4 GW operational in 2035. Of the 1.6 GW already under development, 0.8 GW is awarded to Iberdrola in the 'Vineyard Wnd 1'.

Last September, Avangrid presented its investment plan until 2025, a period in which it plans to invest 14,600 million dollars (about 14,787 million euros), including the acquisition of PNM Resources.

Specifically, the US energy company will invest that total figure in the next three years, of which the majority, some 12,800 million dollars (about 12,964 million euros) will be allocated to the Networks business, thus absorbing 88% of the investments in the period.

For its part, Avangrid will allocate a total of 1,800 million dollars (about 1,823 million euros) to the Renewables business, mainly to offshore wind power, with 1,200 million dollars (about 1,215 million euros).

This total investment figure for the period includes the slightly more than 6,500 million dollars (about 6,583 million euros) that the purchase of PNM Resources would entail, an operation that was blocked by the New Mexico Regulatory Commission at the end of 2021, a decision that the company resorted and that it trusts to be able to close throughout the coming year.

Iberdrola has been present in the United States for 15 years and has assets that exceed 40,000 million dollars (about 40,558 million euros) in 24 states, serving a population of more than seven million people.

Iberdrola's US subsidiary began trading on the New York Stock Exchange six years ago, is present in 25 states and manages more than 9,000 megawatts (MW) of generation capacity (8,000 MW renewable) and more than 170,000 kilometers of power lines to through eight public service companies in New York, Connecticut, Maine and Massachusetts, serving a population of seven million people, with 3.3 million supply points.

In addition, it is a pioneer in the development of offshore wind power in the United States, where it is building the first large-scale offshore wind project in the country, 'Vineyard Wind 1', and has a portfolio of nearly 5,000 MW in this technology thanks to the 'Park City Wind' projects in Connecticut; the 'Commonwealth Wind' itself, in Massachusetts; and 'Kitty Hawk', in North Carolina.