The federal government has shortened the time it will take to offer leases to offshore wind farms, a step that should have residents seeing wind turbines off the New Jersey coast a year earlier than expected.
The revisions to the U.S. Department of Interior’s offshore wind-leasing program were welcomed by developers seeking to build huge offshore wind farms. They have long called for shortening of the permitting phase, which, until now, could take up to seven years.
At least four developers want to build wind farms off the coast of South Jersey, each of which could run more than $1 billion. Other projects could emerge once the state finishes writing crucial regulations governing how the developers will be paid for the power their turbines produce, a process expected to be completed by next spring.
A Step Forward
“This is welcome news, a promising step forward,” said Scott Jennings, president of PSEG Global, part of Garden State Offshore Energy, which wants to build a 350-megawatt offshore wind farm in partnership with Deepwater Wind. “Streamlining the leasing process by eliminating unnecessary steps is an important component in making offshore wind a commercially viable business,” Jennings said.
Still, Jennings conceded developers like Garden State Offshore Energy face a long timeframe in bringing wind farms into commercial operation. “There is still a lot of work to be done on many fronts,” he said.
But Jim Lanard, president of the Offshore Wind Development Coalition, a Washington D.C.-based trade organization, was more optimistic about the action, saying it has the potential to cut two years off the permitting and leasing stages.
In addition, the department also said it is still working to compress the timelines for the projects that already have been announced, Lanard said.
Beyond trimming the timeframe for permitting, the federal agency, now known as the Bureau of Ocean Regulation, Management and Enforcement, will identify priority Wind Energy Areas offshore, which are those locations most suitable for offshore wind. Data would continue to be collected for these high-priority areas to inform government and industry assessments and planning, allowing a more efficient process for permitting and siting.
“This accelerated and focused approach to developing the nation’s Atlantic wind resources will encourage investment while ensuring projects are built in the right way and in the right places,” said Michael Bromwich, director of the bureau.
While offshore wind developers were encouraged by federal efforts to streamline the leasing process, others said they also are focused on state efforts, which are designed to set up a financial framework so that developers can convince Wall Street to fund offshore wind development. That process includes allowing developers to earn Offshore Renewable Energy Credits (ORECs) for the electricity their projects generate.
“As important as the federal regulatory process is, the ‘OREC program’ currently under development by the state Board of Public Utilities is the critically important policy that will be driving the creation of a new offshore wind industry for New Jersey,’’ said Erich Stephens, a vice president for Offshore Wind MW, another developer.
The state agency has held two separate stakeholder sessions on crafting the regulations but is not expected to propose any rule until early next year.