Friday, December 8, 2023

Iberdrola freezes 1.2 billion US projects due to lack of profitability

Iberdrola’s subsidiary in the United States, Avangrid, decided to paralyze the power purchase agreements (PPA), which it signed for an offshore wind ‘megaproject’ in the North American country, known as Park City Wind. The Spanish electricity company considers that the conditions agreed do not guarantee economic viability, despite the fact that The project costs 1.2 billion euros.

Through a statement reported by Europa Press, the subsidiary of the Spanish energy company confirmed that all these effects have created Park City Wind, an 804 megawatt (MW) offshore wind farm planned off the coast of the State of Connecticut and whose the investment amounts to about 1,200 million euros be a project not financially under the conditions of existing contracts.

Explore solutions to financial challenges

Avangrid highlighted that a year ago it was the first offshore wind developer in the United States in “announce the unprecedented economic difficulties facing the industry, including record inflation, supply chain disruptions, and sharply rising interest rates.”

The US subsidiary of Iberdrola further stated that, after exploring all possible solutions to the financial challenges faced by the project and participating in “fruitful and good faith discussions” With Connecticut State officials on the matter, “the best path for Park City Wind is to terminate the power purchase agreements and a new bid for the project.” “According to the contracts, Avangrid and Connecticut Electric Distribution Company agree to terminate PPAs, which will allow all parties the opportunity to pursue an appropriate path forward,” the company added.

“The best path forward for Park City Wind is to complete the power purchase agreements and a new offer for the project”

During this same year, Avangrid also agreed to terminate the energy purchase and sale contract associated with its wind project. marina Commonwealth Wind, de 1,200 (MW) for the same reasons of difficult economic viability under such conditions and continued to pay 48 million dollars (about 44 million euros) for violating the agreement. In both projects, Iberdrola’s desire is to continue, and improve the outcome of the various procedures and permits, and plans to attend the next auctions.

Avangrid, with approximately 40,000 million dollars (about 37,012 million euros) of assets, it is present in 24 states and manages almost 10,000 MW of installed capacity, of which more than 8,600 MW is renewable (mainly wind and solar photovoltaic), and more than 130,000 kilometers of lines of electricity through eight distributors in New York, Connecticut, Maine and Massachusetts.

Also, Iberdrola spearheaded the first large-scale offshore wind project in the United States, ‘Vineyard Wind’, which will start operations in the last quarter of this year.

World Nation News Desk
World Nation News Desk
World Nation News is a digital news portal website. Which provides important and latest breaking news updates to our audience in an effective and efficient ways, like world’s top stories, entertainment, sports, technology and much more news.
Latest news
Related news