A public-private partnership will improve the infrastructure for East Coast wind
A large investment in the essential marine infrastructure for the port of New London in the State of Connecticut was just unveiled. This will revitalise the State Pier in a harbour development plan and put in place facilities to to establish the region as a central hub in New England for the developing offshore wind industry.
The port is near New York, North of Long Island and adjacent to Block Island and some of the upcoming offshore wind designated areas for new projects. The $93 million (€83 million, £71 million) is made up of around half state investment, and half private funds. Construction is estimated to be completed by March 2022.
The Connecticut Port Authority, the state’s quasi-public agency responsible for marketing and coordinating the development of the state’s ports and maritime industry, and terminal operator Gateway, are partnering with Bay State Wind, a joint venture between Ørsted and Eversource, on a new deal that will redevelop State Pier into a world-class, state-of-the-art port facility through combined public-private investment of $93 million to upgrade its infrastructure and heavy-lift capability. These upgrades will allow State Pier to meet the facility requirements of the offshore wind industry and will benefit the port’s long-term growth by increasing its capability to accommodate heavy-lift cargo for years to come.
“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,” Governor Ned 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. We look forward to working with our new partners to position Connecticut as a leader in the offshore wind industry and expand economic opportunity throughout the region.”
The State Pier harbour development plan calls for a two-phased effort at the pier. Firstly, a three-year development project will upgrade the facility infrastructure to meet the heavy-lift requirements of Ørsted and Eversource’s offshore wind components. Secondly, following the successful completion of the project, Ørsted and Eversource will enter into a ten-year lease agreement granting their joint venture the use of State Pier for wind turbine generator assembly and staging.
This need for infrastructure has been highlighted in previous blogs. This is a welcome development and shows that at state and local level, authorities are well aware of the obligation to install or upgrade effective infrastructure to support the land and sea operations of the new US offshore wind industry.
“The Connecticut Port Authority was established to grow the state’s economy and create jobs by investing in the maritime industry,” Scott Bates, chairman of the Connecticut Port Authority, said. “For over a year, we have been working towards a vision where increased port activity drives economic growth and creates jobs throughout the state. This Harbour Development Plan brings that vision to life. In the short-term, our local workforce will upgrade State Pier into a world-class port facility, and our regional manufacturing workforce will build components for our new partners in the offshore wind industry. Longer-term, the increased capacity of State Pier will continue to expand the flow of cargo into New London, which will extend our state’s economic reach even farther, benefiting workers throughout Connecticut.”
This deal aligns with the Lamont administration’s plans to expand the use of carbon-free energy sources.
“We’ve worked closely with the Connecticut Port Authority, Ørsted, and Eversource to help realize the collective vision of bringing the offshore wind industry to New London,” Philippe De Montigny and Matthew Satnick, co-CEOs of Enstructure, Gateway’s financial partner, said in a joint statement. “We believe our partnership will yield strong long-term growth for the City of New London and the State of Connecticut. As the port operator for both New Haven and New London, we will also ensure that our maritime terminal operations continue to deliver best-in-class service for our conventional cargo customers.”
“Today’s announcement lays the foundation for Connecticut to play a leading role in the United States’ fast-growing offshore wind industry and supports our transition from older, dirtier fuel sources to clean, affordable, carbon-free energy,” Lee Olivier, Eversource Executive Vice President for Enterprise Energy Strategy and Business Development, said. “Our collaboration with the State of Connecticut, the Connecticut Port Authority, the City of New London and Gateway Terminal brings together the resources and expertise needed to redevelop the New London State Pier into a state-of-the-art offshore wind facility to help Connecticut reach its critical greenhouse gas reduction goals.”
“With this public-private partnership comes the significant opportunity for job creation, local investment, and economic benefits for south-eastern Connecticut and the wider region,” Thomas Brostrøm, Ørsted President of North America and Ørsted U.S. Offshore Wind CEO, said. “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.”
“South-eastern Connecticut has long been a centre of our region’s maritime economy, and today’s announcement represents a commitment to realize the potential of the New London State Pier – and the jobs and growth that will go along with it,” Congressman Joe Courtney said. “The positive and long lasting effects of an investment like this – which will create new jobs and increase activity at the port – will be felt across our entire state for years to come. Not only does this investment prepare the State Pier up for future success by upgrading its infrastructure and heavy-lift capabilities, it also creates jobs in the immediate future, and keeps our state on track towards expanding the use of renewable energy.”
“As New London has grown, we have formed amazing partnerships with the State of Connecticut, Gateway New London LLC, the Connecticut Port Authority and now the Ørsted and Eversource joint venture,” Mayor Michael Passero said. “Today our city is emerging as an epicentre of innovation as new businesses and supply chains have invested in our community in preparation for this new industry coming to New London. I’m thrilled about today’s announcement of the community host agreement with Ørsted and Eversource. It’s proof that they will be great partners with the city as they join our business community. Most important of all, this is a big win for New London’s taxpayers as we bring in new revenue, new jobs, and new opportunities to the city today and into the future.”
Harbour Development Plan Highlights
With this plan, the Connecticut Port Authority is responsible for oversight and execution of the development project. Construction is tentatively scheduled to begin in January 2020 following bid solicitation and permitting. It is expected to be finished in March 2022.
- Upon project completion, Ørsted/Eversource will enter into a ten-year lease agreement with an option to extend for seven years.
- A total of $93 million in capital expenditure commitments from multiple sources will go towards the development of State Pier:
- Ørsted/Eversource commits $35 million in new capital expenditures for State Pier infrastructure improvements, including $2.5 million to the CPA to offset operational costs during the three-year development project.
- The State of Connecticut will commit to $35.5 million for State Pier infrastructure improvements, including $25.5 million from the Connecticut Port Authority, as previously announced, and $10 million in new funding from the Department of Economic and Community Development through the Manufacturing Assistance Act.
- $22.5 million was previously committed for State Pier infrastructure improvements, and Ørsted/Eversource will honour that commitment.
- The Connecticut Port Authority will receive annual fixed fee payments of $3 million and will be eligible for a one-time completion bonus for on-time completion of the development project in March 2022.
- Gateway will serve as the terminal operator and will still be responsible for the following fees as outlined in the original operator agreement with the Connecticut Port Authority:
- A variable fee of 7 percent of its annual revenue (the minimum annual guarantee is not in effect during the terms of this agreement).
- 50 percent of dockage and wharfage fees.
- This agreement is contingent upon receipt of all federal and state permits to support the facility development project.
This is a welcome development and will ensure that facilities and support systems are in place to ensure that the growing US Offshore Wind industry is not held back through lack of essential harbour facilities.
All this and more will be discuss at the 4th Annual US Offshore Wind Conference, June 10-11, 2019 in Boston. Find out more here.