Developer Scales Back Plans for Offshore Wind Transmission System

Jersey coast -- rather than longer stretch of Eastern Seaboard -- new target for underground power backbone

If a power transmission backbone is built under the ocean along the Eastern Seaboard to promote the development of offshore wind farms, it will likely be located off the New Jersey coast and, quite possibly, nowhere else.

The developer of the proposed system is scaling back its efforts to establish what once was billed as a 300-mile underground ocean transmission line, stretching from Virginia to New Jersey. It’s now completely focused on building a so-called underground transmission superhighway solely off the Garden State, at least for the time being.

Originally dubbed the Atlantic Wind Connection, the developer is now calling the project the New Jersey Energy Link (NJEL). It would transmit electricity from the offshore wind farms and other generators to users in northern, central, and southern parts of the state.

The project, backed financially by Google and other international conglomerates, is touted by its advocates as strengthening the state’s electric grid by increasing reliability and by reducing congestion, a major source of spikes in energy bills for consumers.

By scaling back the project to only focus on New Jersey, overall costs for the first phase dip from more than $5 billion to $1.8 billion, all of which would be borne by ratepayers in the state. Bob Mitchell, the chief executive officer of NJEL, said that costs would be more than offset by a reduction in congestion-related spikes and energy prices due to the new transmission system.

The project has received a mixed response from at least one offshore wind developer, as well as consumer advocates, because of its price tag, which does not include the billions of dollars it will take to develop the 1,100 megawatts of offshore wind capacity proposed by New Jersey’s Energy Master Plan by 2020.

Still, the project retains many backers, primarily on the legislative side, largely because it is viewed as one of the important pieces in making New Jersey the hub of an emerging offshore wind manufacturing sector in the state. That goal has been embraced vocally by the state Legislature and Christie administration, although the latter’s actions have raised skepticism about the degree of its commitment to offshore wind.

Those concerns reflect, in part, the failure of the New Jersey Board of Public Utilities to adopt a workable funding mechanism to help offshore wind developers line up financing for their projects.

Proposals developed by the offshore wind developers and a consultant retained by the agency were deemed to be unworkable because the Legislature and Christie administration could still appropriate money from ratepayers to fund the projects, if the state had problems balancing its budget. There is a new proposal being reviewed by the agency put together by the offshore wind developers, but it has yet to win approval.

The other hurdle facing offshore wind developers—11 have expressed interest in building wind farms—is the slow pace of the federal government in awarding leases to develop projects in areas off the coast as well as a lengthy permitting process.

If its project moves forward, an NJEL-commissioned study said construction of an important piece of offshore wind farms — converting platforms to help move the electricity from the wind turbines to shore — could be fabricated at the Paulsboro Marine Terminal in South Jersey.

Building the platforms there would create a workforce of up to 600 people at Paulsboro, according to the study. Overall, NJEL claims it would create a total of 1,980 direct jobs during the decade-long construction and installation of the project.

“We believe there is good reason to move quickly,’’ Mitchell said in an interview in Trenton. “The backbone is really the foundation of building an offshore wind industry.’’

The project is focusing all of its efforts to build the offshore link off the coast of New Jersey, which always had been projected to be part of the first phase of the 300-mile link. The company no longer has any government relations people in Maryland, Delaware, and Virginia, according to Mitchell.

In the New Jersey Legislature, a bill (S-2611) has been introduced by Senate President Stephen Sweeney (D-Gloucester) , which would urge the regional operator of the electric grid, PJM Interconnection, to include an offshore transmission infrastructure as a project in its regional transmission expansion plan. If so, it could allow the project move forward with approvals from the federal government.