New Jersey still has an opportunity to be a leader in an emerging offshore wind industry, despite years of delay in putting together a financial plan to lure developers to build along the coast, officials said yesterday.
The state is well positioned to develop offshore wind farms thanks to natural features that include a relatively shallow coastal shelf; abundant wind resources; and a proximity to markets with a demand for electricity, industry executives and government officials said at a forum at Stockton University.
But it may not happen for at least a few years. With Gov. Chris Christie questioning the economics of the technology, and developers having to jump through regulatory hoops prior to winning approval for any projects, it likely will be at least that long.
“We may need a new governor on this one,’’ said Sen. Jim Whelan (D-Atlantic), one of the panelists and a longtime advocate of offshore wind projects, including a stalled smaller demonstration project proposed three miles off Atlantic City.
Nevertheless, the two developers that have secured leases on hundreds of thousands of acres to build huge wind farms expressed optimism about their prospects off the Jersey coast.
“This is a site very similar to the second round of projects we developed in the United Kingdom,’’ said Carolyn Heeps, developer of strategy development for RES America Inc., which has partnered with a Danish company to build one-third of Europe’s offshore wind capacity.
Paul Rich, project development director for the other developer, U.S. Wind, Inc., agreed. “We’re very glad to be in New Jersey,’’ Rich said. His company also has won leases off the Maryland coast and hopes to have an offshore wind farm in service by the first quarter of 2020. What is happening in Maryland is likely to occur in New Jersey, he said.
Maryland is the only state along the Eastern Seaboard to have a fiscal mechanism in place to pay for at least some of the electricity generated from the projected wind farm, which will be designed initially to generate 750 megawatts.
[related]New Jersey has yet to come up with a financial mechanism to pay for the wind farms, but that should not set back the state’s efforts in offshore wind, according to Walter Cruickshank, deputy director of the Bureau of Ocean Energy Management, which is overseeing federal efforts to promote the renewable energy source.
The fact that it has a law allowing it to establish such a mechanism puts it ahead of other states, Cruickshank said. “It’s an important issue but New Jersey is well positioned to be a leader,’’ he said.
Under an offshore wind development law enacted almost six years ago, the state Board of Public Utilities was supposed to propose regulations by early 2011 that would give credits — dubbed Offshore Renewable Energy Credits — to developers to help finance the wind farms. Utility customers would pay for the credits by a surcharge on their monthly bills.
“You can’t finance a project unless you have someone to pay for the electricity,’’ said Paul Gallagher, chief operating officer of Fishermen’s Energy, which is trying to convince the Christie administration to approve a small 24-megawatt wind farm off Atlantic City, a project first proposed in 2011. It has been rejected several times by the BPU as being too costly to ratepayers.
Rich also said the credits are “absolutely vital’’ to getting the industry off the ground.
The developers touted the economic benefits and jobs that would be created if New Jersey is successful in developing a robust offshore wind industry, especially if it is large enough to attract manufacturers of turbines and other equipment needed for the sector.