Avangrid says Commonwealth Wind "no longer viable", seeks more time to adjust

Avangrid Inc (NYSE:AGR) has filed a motion with the Massachusetts Department of Public Utilities (DPU) to suspend for a month the review of the power purchase agreements (PPAs) for the 1,232-MW Commonwealth Wind project.

“As has been publicly reported in recent weeks, global commodity price increases, in part due to ongoing war in Ukraine, sharp and sudden increases in interest rates, prolonged supply chain constraints, and persistent inflation have significantly increased the expected cost of constructing the Project. As a result, the Project is no longer viable and would not be able to move forward absent amendments to the PPAs,” the US subsidiary of Spanish electric utility Iberdrola SA (BME:IBE) says in the filing.

Avangrid, though, stressed it remains fully committed to the project and noted that it is still well-positioned to reach commercial operations in 2028. It said in a separate statement that the requested one-month suspension will enable it to evaluate the current economic challenges and assess measures that would bring the project back to economic viability. This would include “modest changes to the PPAs.”

In December 2021, the Commonwealth Wind project was selected as part of Massachusetts’ third offshore wind competitive procurement process. At the time, the project was a joint venture between Avangrid Renewables and Copenhagen Infrastructure Partners (CIP) but the Iberdrola subsidiary became its sole owner the following month.

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