Avangrid has not been able to make ends meet on the 1.2 gigawatt (GW) Commonwealth Wind project, and therefore the wind developer has agreed to pay almost USD 49m to the state of Massachusetts to get out of the obligation, writes Recharge News.

Avangrid won the bid to build the offshore wind project back in December 2021 and as recently as April last year, the developer signed power purchase agreements with local utilities at a price of USD 72 per megawatt hour, which was a new low for the sector.

Since then, high inflation and the accompanying high interest rates have dramatically increased the cost of developing wind projects, and Avangrid has asked for its contract to be terminated.

The payment of almost USD 49m will go to utilities Eversource, National Grid and Fitchburg Electric & Gas.

Spanish Iberdrola is the controlling owner with almost 82% of the shares in Avangrid.