Dive Brief:
- The developer behind the 800-MW Vineyard Wind project offshore Nantucket filed suit April 8 against its turbine supplier, GE Renewables, seeking to block it from exiting its supply agreement over a payment dispute.
- The complaint, filed in Suffolk County, Massachusetts Superior Court, says Vineyard Wind is entitled under the contract to withhold payment to offset $853 million in costs incurred to date by GE Renewables’ defective blades, from which Vineyard Wind says it suffered “catastrophic injury.”
- Vineyard Wind said a 2024 blade break caused a six-month construction hiatus, during which a “root cause” analysis performed by GE Renewables concluded that 68 of the 72 GER blades installed at the project were also defective. Despite what the complaint described as the GE Vernova subsidiary’s “poor performance,” Vineyard Wind CEO Klaus Skoust Møller said in a declaration that it would be “practically impossible” to replace GE Renewables at this point.
Dive Insight:
Vineyard Wind wrote that the lawsuit comes in response to a Feb. 27 notice from GE Renewables “threatening termination of the parties' Turbine Supply Agreement” due to Vineyard Wind’s failure to pay a GE Renewables bill that is in excess of 5% of the project’s $1.3 billion contract price — or $65 million.
The complaint asks a judge to declare the termination notice invalid, and to issue a temporary restraining order, preliminary injunction and permanent injunction enjoining GER from failing to perform work according to its contracts.
Vineyard Wind admitted to withholding around $308 million to “set off ‘payments that would otherwise have been due’ to GER,” but said the supply agreement “expressly allows VW to withhold amounts that GER owes VW against payments otherwise due to GER under the TSA, thereby discharging VW's payment obligations.” After applying setoffs, Vineyard Wind says GER still owes the project $545 million.
The 2024 blade break resulted in opposition efforts from the residents of Nantucket, who raised environmental concerns about the fiberglass debris that washed up on their beaches.
The filing describes an ensuing remediation plan which required GE Renewables to remove all of the blades manufactured at the company’s facility in Gaspé, Canada, and replace them with others manufactured at a facility in Cherbourg, France.
GE fired more than 40 employees at the Gaspé factory, Vineyard Wind said in its complaint, and the Gaspé press reported that an internal investigation by GE Vernova, which GE Renewables is a division of, performed an internal investigation that found that “Gaspé employees had been instructed by their supervisors to falsify critical data from the quality assurance process.”
“The process of taking down and replacing 72 blades devastated the Project and caused it to incur substantial damages resulting from the delay, including more than a full year of lost profit under Power Purchase Agreements, additional overhead costs, construction costs, financing costs, and costs incurred to coordinate other vendors and contractors,” Vineyard Wind alleged.
However, Vineyard Wind does not want GE Renewables — the project’s installation contractor as well as its turbine supplier — to exit the project, as it argues that the company still has significant work to do.
“Not one of the 62 GER [wind turbine generators] has yet met the contractual requirements for VW taking them over,” Vineyard Wind said in its filing. “Without GER's maintenance and remediation services, it is highly unlikely that VW would be able to sustain commercially viable levels of operation and production through the critical early years of the Project's operational phase.”
A preliminary hearing is scheduled for Thursday.
