The bill H.4568 was passed on Sunday (31 July) in a late-night session of the Massachusetts state legislature before the end of a law-making session.

The bill also requires utilities to acquire 1.2GW from other renewable sources, including onshore wind, solar and hydropower.

Offshore projects would be awarded power purchase contracts of 15 to 20 years, under the new law, which paves the way for the state to start building projects off the US's northeast coast.

The state's upper Senate house proposed utilities buy 2GW of offshore wind, but the House of Representatives, the lower legislative house, was reportedly only prepared to support 1.2GW of capacity. The 1.6GW figure — midway between the two proposals — was a compromise.

Danish developer Dong Energy and Offshore MW — affiliated with Germany's WindMW – are planning major offshore projects off Massachusetts. US developer Deepwater Wind is also trying to start two major projects off the north-east US coast.

Dong Energy, the world's largest offshore wind developer, called the bill a "landmark moment".

Its 1GW Bay State Wind project, off the coast of Martha's Vineyard, was acquired from RES Americas in April 2015 following the lease zone auction held by the Bureau of Ocean Energy Management (BOEM).

"With this legislation, Massachusetts shows clear leadership in setting out a strong ambition for offshore wind. The offshore wind industry has the potential to create thousands of local jobs up and down the East Coast, and Massachusetts' has positioned itself to be the leader in making the industry a reality," said Dong's North American general manager Thomas Brostrom.

"Additionally, this creates the right environment for competition between the developers allowing the best value for ratepayers for any offshore wind contracts awarded," he said.