Offshore Backbone Developer Foresees Huge Wind Industry Along Jersey Coast
The future according to AWC includes cheaper electricity and tens of thousands of new jobs.
While New Jersey is moving to develop 1,100 megawatts of offshore wind power, Bob Mitchell envisions a much more audacious industry springing up off the coast of the Eastern Seaboard -- one he claims could lower steep energy bills for consumers and create tens of thousands of jobs.
Mitchell is the chief executive officer of Atlantic Wind Connection (AWC), a company seeking to build an offshore electric backbone transmission system capable of supporting up to 7,000 megawatts of offshore wind, a $30 billion industry that would strengthen the reliability of the nation’s largest power grid.
For the past few weeks, AWC has been pitching the project and its benefits around the state, stopping Friday in Red Bank at Molly Pitcher Inn to talk it up to a roomful of local officials, Tea Party activists, union representatives, a couple of cable manufacturers and marine equipment dealers.
The 10-Year Plan
The $5.5 billion project involves a 10-year plan to build 350 miles of subsea transmission lines, stretching from Virginia to southern New Jersey, where the first leg of the project will begin -- if it succeeds in winning permits from the federal government, states and PJM Interconnection, the operator of the regional power grid.
At this point, it is unclear how the AWC project, which has the backing of Google, as well as a Belgian company involved in building offshore wind transmission systems in Europe, meshes with New Jersey's own offshore wind efforts. Eleven developers have expressed an interest in building offshore wind farms to the federal government, and four of those are actively pressing their case to state officials.
None of those four have signed agreements with AWC to hook into its project, but one of them, Offshore MW, attended the meeting in Monmouth County. New Jersey hopes its efforts to develop offshore wind farms will attract related manufacturers, including turbine manufacturers, construction and marine equipment firms, dredging companies and makers of submarine cable systems.
Mitchell noted that a typical offshore wind turbine consists of more than 7,000 parts, offering ample opportunities for states like New Jersey to attract some of the sector’s manufacturing. One person at the meeting expressed skepticism about the state’s ability to do just that, given its high property taxes, saying it would be a hard sell convincing a manufacturer to come here.
But Mitchell said AWC has been talking to some cable firms and they are interested in locating in New Jersey. Much, however, depends on having a multitude of offshore wind farms, he said, saying the state wouldn't attract an industry if had just one or two farms. The AWC project hopes to begin construction in the spring of 2014.
More than $30 Billion
If up to 7,000 megawatts of offshore wind farms are built, the total private investment would probably exceed $30 billion, including AWC’s $5.5 billion cost, Mitchell said. But a study done for AWC projected there would be a net benefit of $13 billion to consumers after that investment, he noted. Those benefits would include lower energy bills for customers (by reducing congestion on the power grid that spikes electricity prices), reducing the cost of transporting power from offshore wind farms, and tax benefits from the estimated 35,000 construction and permanent jobs associated with the project, Mitchell said.
Erich Stephens, a vice president at Offshore MW, conceded that building an industry will be a challenge, especially given an offshore wind law that requires developers to demonstrate a positive net impact before winning approval from the state. "It’s up to us to bring those jobs to the state or it’s not going to happen," he said. "I hear your skepticism. It's a challenge."
Others, however, lauded the project. "Overall, I don't think how anyone can consider this project won’t be good for the environment for years to come," said Wyatt Earp, of the International Brotherhood of Electrical Workers Local 400.
Mitchell said the challenge will be developing a project that is both cost-effective for ratepayers and is built in a timely fashion.