State strikes deal for offshore wind hub in New London
New London — The state has reached a harbor development agreement and announced the start of a $93 million investment at State Pier, the beginning of what state officials foresee as the transformation of an underutilized port into a hub for the offshore wind industry.
Gov. Ned Lamont visited City Pier on Thursday to announce the private-public partnership and lease agreement between the Connecticut Port Authority, pier operator Gateway and Bay State Wind, which is a joint venture between offshore wind giant Ørsted and Eversource.
The news comes a day after Gateway New London LLC took over as port operator as part of a 20-year agreement. Gateway also operates New Haven's port.
“Connecticut’s maritime economy has significant potential to drive economic growth and create jobs across the state, and redeveloping State Pier is a central component to that growth,” Lamont said. “This new public-private partnership reaffirms the unwavering commitment of the state to increase procurement of offshore wind and make the economic expansion of our maritime economy a reality.”
The Connecticut Port Authority will oversee a project at State Pier with an aggressive timeline to upgrade the infrastructure and add heavy-lift capacity to accommodate components of offshore wind turbines. After a design and permitting phase, construction tentatively is scheduled to start in January 2020 and finish by March 2022, Connecticut Port Authority Chairman Scott Bates said.
Prior to Thursday’s announcement, the Port Authority voted at a special meeting to prepare permit applications and hire AECOM Technical Services at a cost of $794,790 for the permitting and contract bid development. During that meeting, Noank farmer Kevin Blacker criticized the board's closed-door negotiations throughout the process.
The completion of the project will be followed by the signing of a 10-year lease agreement with an option to extend for seven years.
The $93 million public-private partnership includes $35.5 million from the state and a $57.5 million investment by Ørsted and Eversource, including $2.5 million to the Port Authority to offset operational costs.
Ørsted previously had committed $22.5 million after Connecticut secured 300 megawatts from Ørsted’s Revolution Wind farm south of Martha’s Vineyard. Ørsted and Eversource jointly have agreed to add $35 million as part of the new agreement.
“We look forward to continue working with the state, the City of New London and our partners the Connecticut Port Authority and Gateway Terminal, as we drive towards a green economy, bring more sources of clean energy to Connecticut, and ultimately lower carbon emissions for our planet,” said Thomas Brostrøm, Ørsted president of North America and Ørsted U.S. Offshore Wind CEO.
The Port Authority also will receive annual $3 million payments and be eligible for a completion bonus if the project is done by March 2022.
Bates said jobs will be created for the local workforce as construction starts at the port, and more will be created for the regional manufacturing workforce for building components of the offshore wind turbines. Longer term, Bates said, the increase in activity at the pier will benefit the job market statewide.
Plans for the upgrades at the pier have not yet been created, Bates said, but he acknowledged that the pier will shift away from conventional cargo as it accommodates the wind industry. There will be breaks in activity during construction and offshore wind projects when Gateway may decide to bring in conventional cargo.
David Kooris, deputy commissioner of the state Department of Economic and Community Development, said New London’s port welcomes one to two vessels a month compared to New Haven’s 20. That number is expected to increase to four to five vessels a month when wind activity starts.
Mayor Michael Passero said the city is negotiating terms of a new host community agreement that could provide between $250,000 and $750,000 per year to the city over the 10-year-period of the lease with Ørsted and Eversource. The host agreement previously negotiated with Deepwater Wind, a company that since has been purchased by Ørsted, has New London receiving $1.5 million over a two-year period — money that is still guaranteed as part of new agreement. Passero said the amount of money the city will receive after two years will be based on the amount of offshore wind power purchased by the state.
As part of the Port Authority's agreement with Gateway, New London receives 10 percent of the Port Authority's share of revenue from State Pier — at least $50,000 annually — plus an additional $75,000 to help defray costs of municipal services.
“Today our city is emerging as an epicenter of innovation as new businesses and supply chains have invested in our community in preparation for this new industry coming to New London,” Passero said.
State Sen. Paul Formica, R-East Lyme, a ranking member of the legislature’s Energy and Technology Committee, said in a statement, “unleashing State Pier’s vast potential is our collective priority."
"Our shared goal is to turn New London’s port into the offshore wind capital of the Northeast and open New London to more maritime businesses," Formica said. "This will continue to be a true team effort and I commend the team on its continued push to turn New London and southeastern Connecticut into a regional hub for green jobs.”