Regulatory delay casts doubt on first big offshore wind farm

The Trump administration cast the fate of the nation’s first major offshore wind farm into doubt by extending an environmental review for the $2.8 billion Vineyard Wind project off Massachusetts.

The Interior Department has ordered an additional study of the farm, proposed by Avangrid Inc. and Copenhagen Infrastructure Partners, Interior Secretary David Bernhardt said in an interview with Bloomberg News Friday. The project, which has drawn opposition from fishermen and coastal communities, had been scheduled to be operational by early 2022. The developers have warned delays could put it in jeopardy.

Bernhardt said it’s crucial the impacts be thoroughly studied. “For offshore wind to thrive on the outer continental shelf, the federal government has to dot their I’s and cross their T’s,” he said.

Avangrid sank as much as 0.9 percent to $50.34. It was trading at $50.37 shortly before the close in New York.

The project south of Martha’s Vineyard is crucial to the future of offshore wind in the U.S. It’s the first of several massive wind farms planned off the East Coast. Massachusetts, New York, Maine and New Jersey are all counting on turbines at sea to achieve aggressive clean energy targets. Their efforts are expected to spur an estimated $70 billion offshore wind industry in the U.S. over the next decade.

Vineyard Wind spokesman Scott Farmelant called the Interior Department’s decision “a surprise and disappointment.”

“We urge the federal government to complete the review as quickly as possible,” he said.

Last month, Avangrid Chief Executive Officer Jim Torgerson said on a call with analysts that the project “will be challenged to move forward in its current configuration” if the final study is not issued by early September.

Vineyard Wind, which would have enough capacity to supply about 400,000 homes, has a contract to sell power to three Massachusetts utilities for $65 per megawatt-hour — a lower-than-expected price that encouraged other states to map out plans for offshore wind. That cost, however, hinged on a lucrative tax credit. The company may not be eligible to claim it if construction is delayed too long.

An Interior Department review explored how Vineyard Wind may affect other industries and resources, including marine life. But the National Marine Fisheries Service raised concerns it looked too narrowly at potential cumulative effects on fishing, prompting the supplemental review, Bernhardt said.

“If it’s going to be developed, it needs to be developed in a way that everyone gets to say, at least, that we didn’t shave the ball,” Bernhardt said.

Although the Interior Department has sold the rights to develop wind farms up and down the U.S. East Coast — and states have committed to buying the renewable power they generate — so far just one has been built: a small, 30-megawatt facility near Block Island, R.I., that went online in 2016.