Offshore Wind Bill Sails Through the Legislature

The Christie administration, clean energy advocates, and offshore wind developers back a bill that could put wind farms off the New Jersey coast—and New Jersey out in front of a potentially lucrative green industry

The Legislature yesterday and early this morning swiftly passed a bill that could pave the way for the development of offshore wind farms, a step that could vault New Jersey ahead of other states to take the lead in a new and potentially lucrative green industry.

The bill (S-2036), backed by the Christie administration, clean energy advocates and offshore wind developers, cleared both houses easily. Only a few lawmakers raised concerns about the projected cost to ratepayers of the cleaner but more expensive way of producing electricity. The legislation is expected to be signed quickly by Gov. Chris Christie.

If the bill is signed, the state Board of Public Utilities has 180 days to set up a system for reviewing offshore wind developers’ projects and proposed financing mechanisms to pay for wind farms. Developers would seek the agency’s approval for a fixed price over 20 years of offshore renewable energy certificates, which will pay developers for each megawatt of electricity produced by their wind turbines.

Farming the Wind

At that point, the state would solicit invitations to build offshore wind farms. Four developers have proposed to build wind turbines off the Jersey coast, most of them in the 300 to 350 megawatt range and located between 12 and 20 miles offshore. Besides obtaining state approval, the projects also will require state and federal environmental permits, which in the latter case now is projected to take up to seven years.

Still, the swift approval of the bill, only introduced earlier this month and approved without a hearing from the appropriate committee in the Assembly, was hailed by environmentalists.

“It’s an important step,’’ said Matt Elliott, clean energy advocate for Environment New Jersey, noting the state energy master plan calls for the development of 3,000 megawatts of wind power by 2020. “We’re way behind. We’ve got to catch up if we’re going to meet our goals.”

Three offshore wind farms, totaling about 1,050 megawatts, have garnered most of the focus to date. According to various projections, the three projects will add about $7 billion to ratepayers’ bills over the next 20 years, and those costs do not reflect what some experts say the expense of improvements to the transmission system, which will be necessary to realize the benefits of offshore wind.

“We all want to see renewable energy take off,” said Markian Melnyk, an author of Offshore Power: Building Renewable Energy Projects in U.S. Waters. “If you want to see the industry grow, you have to start planning for a backbone transmission system.”

Building a Backbone

Such a system would involve building transmission lines offshore from Virginia to New Jersey, tying together the projects and linking with existing transmission lines on land serving heavily populated areas. Such a system also would allow electricity to be shifted from areas of surplus capacity to areas of deficit capacity, said Melnyk, who is representing Atlantic Grid Development, an offshore transmission company.

Asked what the cost of such a transmission system would be, Melnyk replied, “It’s not inexpensive.”

But Peter Mandelstam, president of NRG BluewaterWind, one of the offshore wind developers, said the three proposed projects accounting for about 1,000 megawatts of capacity would not require a backbone transmission system although one might be necessary if the number of projects increase.