Avangrid Receives First Tax Equity Funding for Nation-Leading Vineyard Wind 1 Project

Rhea-AI Summary

Avangrid, Inc. (NYSE: AGR) announces critical funding milestone for the Vineyard Wind 1 project, marking a significant step toward delivering the first power from the nation's first large-scale offshore wind project.

Insights

Energy Sector Analyst

The initiation of funding for the Vineyard Wind 1 project by Avangrid, Inc. signifies a pivotal juncture in the progression of renewable energy infrastructure in the United States. The successful procurement of tax equity financing underscores the viability and investor confidence in large-scale offshore wind projects, which are relatively new to the U.S. energy landscape. In terms of energy production, the 806 MW capacity is substantial, positioning the project to substantially contribute to the regional grid and support over 400,000 homes and businesses.

From a financial standpoint, the forecasted savings of $1.4 billion for ratepayers over two decades illustrates the economic benefits of transitioning to renewable sources, potentially influencing future energy policy and investment. The reduction of carbon emissions by over 1.6 million tons annually aligns with broader environmental objectives and can be expected to garner support from stakeholders prioritizing sustainability.

Environmental Economist

The environmental implications of the Vineyard Wind 1 project are profound, with the potential to set a precedent for future offshore wind development in the U.S. The project's alignment with federal renewable energy tax credits highlights the symbiotic relationship between government policy and green energy initiatives. An economic analysis would consider not only the direct financial savings to ratepayers but also the broader economic impacts, such as job creation and the positive externalities associated with reduced carbon emissions.

Moreover, the creation of 937 union jobs exceeds initial projections and demonstrates the project's contribution to local employment and economic growth. This development may encourage policymakers to further incentivize renewable projects, recognizing their multifaceted economic benefits.

Renewable Energy Expert

The technical achievements of the Vineyard Wind 1 project, including the 'steel-in-the-water' milestone and the completion of the nation's first offshore substation, are indicative of the project's advanced stage and readiness to commence operations. This progress is a testament to the growing sophistication of offshore wind technology and project management. The long-term power purchase agreements with major utilities such as National Grid, Eversource and Unitil reflect confidence in the project's reliability and economic feasibility.

The strategic location 15 miles off Martha's Vineyard leverages the coastal wind resources and the scale of the project suggests a significant step towards meeting renewable energy targets. As the project moves towards operational status, it will likely serve as a benchmark for the assessment and development of similar initiatives.

Funding represents critical milestone toward delivery of first power from nation’s first large-scale offshore wind project

BOSTON--(BUSINESS WIRE)-- Avangrid, Inc. (NYSE: AGR), a leading sustainable energy company and member of the Iberdrola Group announced today that the Vineyard Wind 1 project received the first funding from the first-of-its-kind tax equity package signed in October 2023, representing a critical milestone toward the delivery of first power from the project. Supportive government actions, such as federal tax credits for renewable energy projects, have been instrumental for Vineyard Wind 1, which is on track to be the first large-scale offshore wind project in the U.S.

“Receiving this first funding from our tax equity agreement is another key achievement that takes us one important step closer to the historic delivery of first power to Massachusetts,” said Avangrid CEO Pedro Azagra, Avangrid CEO. “As we continue to execute our construction and financing plan for Avangrid’s Vineyard Wind 1, we are demonstrating our ongoing commitment to helping turn the dream of offshore wind in the U.S. into reality.”

Vineyard Wind 1 began on site construction in late 2021, achieved steel-in-the-water in June 2023, and completed the nation’s first offshore substation in July 2023. In July 2021, Vineyard Wind signed the first Project Labor Agreement for an offshore wind project in the United States, which provides for the creation of 500 union jobs through the project. On December 14, 2023, Avangrid announced that Vineyard Wind 1 has delivered nearly double of its commitment through the PLA by creating 937 union jobs through two years of construction.

Vineyard Wind 1 is an 806 MW project located 15 miles off the coast of Martha’s Vineyard and will be the first commercial scale offshore wind project in the United States. The project will generate electricity for more than 400,000 homes and businesses in the Commonwealth of Massachusetts under its competitive long term power purchase agreements with National Grid, Eversource, and Unitil. The project is expected to save ratepayers $1.4 billion over the first 20 years of operation and to reduce carbon emissions by more than 1.6 million tons per year.

About Avangrid: Avangrid, Inc. (NYSE: AGR) aspires to be the leading sustainable energy company in the United States. Headquartered in Orange, CT with approximately $41 billion in assets and operations in 24 U.S. states, Avangrid has two primary lines of business: networks and renewables. Through its networks business, Avangrid owns and operates eight electric and natural gas utilities, serving more than 3.3 million customers in New York and New England. Through its renewables business, Avangrid owns and operates a portfolio of renewable energy generation facilities across the United States. Avangrid employs more than 7,500 people and has been recognized by JUST Capital in 2021, 2022 and 2023 as one of the JUST 100 companies – a ranking of America’s best corporate citizens. In 2023, Avangrid ranked first within the utility sector for its commitment to the environment. The company supports the U.N.’s Sustainable Development Goals and was named among the World’s Most Ethical Companies in 2023 for the fifth consecutive year by the Ethisphere Institute. Avangrid is a member of the group of companies controlled by Iberdrola, S.A. For more information, visit www.avangrid.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20231220209306/en/

Media:

Craig Gilvarg

craig.gilvarg@avangrid.com

(857) 998-1130

Source: AVANGRID, Inc.

FAQ

What is the latest announcement from Avangrid, Inc. (NYSE: AGR) regarding the Vineyard Wind 1 project?

Avangrid, Inc. (NYSE: AGR) has announced that the Vineyard Wind 1 project has received the first funding from the first-of-its-kind tax equity package, representing a critical milestone toward delivering the first power from the project.

When did the Vineyard Wind 1 project begin on-site construction?

The Vineyard Wind 1 project began on-site construction in late 2021.

How many homes and businesses will the Vineyard Wind 1 project generate electricity for?

The Vineyard Wind 1 project will generate electricity for more than 400,000 homes and businesses in the Commonwealth of Massachusetts.

What is the expected impact of the Vineyard Wind 1 project on carbon emissions?

The project is expected to reduce carbon emissions by more than 1.6 million tons per year.

What are the long-term power purchase agreements for the Vineyard Wind 1 project?

The project has long-term power purchase agreements with National Grid, Eversource, and Unitil.

How much is the expected savings for ratepayers from the Vineyard Wind 1 project over the first 20 years of operation?

The project is expected to save ratepayers $1.4 billion over the first 20 years of operation.