Salem could soon have wind staging facility
Quasi-public MassCEC buying land on city’s harbor from Crowley for $30m
Within weeks if not days, the Massachusetts Clean Energy Center is expected to acquire a site for the state’s second wind farm terminal in a deal that will help make the city of Salem a pivotal player in the nascent offshore wind industry.
The quasi-public MassCEC is about to close on a $30 million deal to buy more than 42 acres overlooking Salem Harbor from an affiliate of Crowley, a Florida-based shipping company. The Crowley affiliate bought the Salem property — formerly used by a coalfired power plant — in 2022 for that same sum with the intention of preparing it for wind farm staging, preassembly, and component storage. Crowley even had a lease lined up with wind farm developer Avangrid. Now, Crowley will remain the operator but will lease the facility from MassCEC.
Given the large amount of public money going into developing the port, state officials decided it made more sense to have the property under state control. In 2022, the project was awarded a nearly $34 million federal grant, and then $75 million from a state-run ports infrastructure program. (Some of that money is being used by the MassCEC to buy the site.) Earlier this year, the city of Salem approved a property tax break worth $53.5 million over 20 years, an estimated 42 percent of what Crowley would have otherwise paid. Also as part of the plan, the city of Salem would own five acres of the site.
Crowley Wind Services vice president Graham Tyson declined to say how much money his company is investing, although state officials have pegged the total private investment for the project
at around $170 million.
Tyson said Crowley hopes to close on the deal with MassCEC by the end of December or in January. The company aims to start work in 2024 and open the new port sometime in 2026. Among other things, the project involves fortifying the site for heavy machinery and equipment, building two new ship berths, and some dredging of the harbor channel.
“This is absolutely in the state’s interest and in the industry’s interest ... that we get this port up and online,” MassCEC chief executive Emily Reichert said. “We are pioneering a new path forward and building a new industry as we speak. This is a situation where everyone needs to be pulling together: state government, federal government, the developers that are going to be running the port.”
While the project will also allow the harbor to accommodate bigger cruise ships, the main focus is on wind farm construction.
That industry experienced some big growing pains as costs skyrocketed in 2022, upending the project finances and prompting several East Coast wind farm developers to scrap their contracts in the hopes of rebidding at higher prices. Avangrid was one, scuttling contracts with Massachusetts utilities for its Commonwealth Wind project south of Martha’s Vineyard as well as its Park City Wind deal with Connecticut. Construction work for both projects had been slated for the Salem terminal, which would complement the MassCEC’s existing New Bedford port.
Avangrid is planning for the next round of contract bids now, and executive Ken Kimmell said his company still intends to use the Salem port. MassCEC ownership is “the best of both worlds,” Kimmell said, because this important site is now under state control while the agency still has an experienced operator, in Crowley, overseeing it.
Even with those delays, Tyson said he expects the facility will play a key role in building offshore wind farms south of Martha’s Vineyard over the next 10 years, and then in the Gulf of Maine as those waters open up for development. Crowley will only directly employ up to 15 people there in long-term jobs. But at any given point during a wind farm’s construction, 150 people or more could be working on the site, Tyson said.
All this work is done with an eye toward Massachusetts becoming net-zero in terms of carbon emissions by 2050. To pull it off, offshore wind power will play a critical role, and a second terminal will give Massachusetts more capacity for on-shore work beyond what can be done now in New Bedford.
“For that amount of clean energy, we’re going to need to have another port, and probably more beyond that,” Reichert said.
The deal between Salem and Crowley was in the works under former mayor Kim Driscoll’s administration and continued after Driscoll was elected lieutenant governor last fall and her chief of staff in City Hall, Dominick Pangallo, succeeded her in the mayor’s office. Local officials point to numerous benefits from the Crowley project, such as the introduction of a new industry to the city.
“Obviously, it’s great for a place like Salem that’s very tourism-dependent,” Salem City Councilor Jeff Cohen said. “To be on the leading edge of a new industry, that’s got a lot of promise.”