How hot is offshore wind? It’s generating enough spark to revive a partnership between Deepwater Wind and Public Service Enterprise Group.
The joint venture is planning to develop an offshore-wind project about 16 miles from Cape May, the latest sign that a once-stagnant sector is being given new life by a governor in Trenton with aggressive ambitions to make New Jersey a leader in the industry.
In another signal of change, EDF Renewable Energy, a global developer of renewable-energy projects, announced yesterday it has a preliminary agreement to acquire Fishermen’s Energy, which has unsuccessfully tried for years to win approval of a small, 24-megawatt pilot project three miles off Atlantic City.
The new optimism is rooted in the Murphy administration’s goals of developing 1,100 megawatts of offshore-wind capacity along the coast of New Jersey, which would eventually reach 3,500 megawatts by 2030. Those commitments are backed up by yet-unknown subsidies from ratepayers to help make these projects profitable.
That enthusiasm was reflected in a packed offshore wind conference held yesterday in Princeton, where several hundred advocates gathered to tout the benefits of a cleaner energy source that might provide a boost to the green economy while helping combat climate change.
“New Jersey is an ideal place to grow our industry,’’ said Gov. Phil Murphy, the keynote speaker, talking about the potential to power 1.5 million homes with clean energy from offshore wind. “This is an all-in attempt to fight climate change.’’
Don’t move too fast
With the nation’s first offshore-wind farm operating off Rhode Island for the past year, its owner, Deepwater Wind, urged caution about moving too fast, allowing time for the industry to scale up to address both community expectations and other issues. It has projects pending in Maryland and Connecticut, too.
Deepwater is planning projects, including off New Jersey, in the 100,000 acres it has acquired offshore in the Delaware Bay, according to Clinton Plummer, vice president of development. “We plan to bid in and win in New Jersey,’’ he said.
Finding funding for wind
The project is likely to be about 200 megawatts in capacity, but Plummer declined to expand on other aspects of the proposal, saying much would depend on input from the state. If the Board of Public Utilities moves quickly to adopt a financing mechanism for funding projects, it could submit an application by the end of this calendar year, he said.
“We think it will be very, very lower than what people are expecting,’’ Plummer said, referring to one of the biggest hurdles faced by offshore wind, the cost it will impose on electric customers.
Garden Shore Offshore Energy, a joint venture between Deepwater and PSEG Power Ventures, pushed offshore wind during the Christie administration, but abandoned the project when it was clear the governor had cooled on promoting the renewable-energy resource.
“The partnership is alive,’’ said Michael Jennings, a spokesman for the company. “What the state does, we want to be a part of. We’ve never abandoned offshore-wind development and partnered with a top-flight developer and secured a lease that could benefit New Jersey.’’
If so, it would mean PSEG is seeking to invest in another potentially lucrative energy proposal that relies on ratepayer support from charges on their monthly bills. In a pair of legislative hearings today, lawmakers will vote on bills to provide up to $300 million annually in subsidies from ratepayers to keep PSEG nuclear plants profitable.
Buying up wind
Meanwhile, EDF Renewable Energy, which has developed 400 megawatts of offshore-wind capacity in Europe, announced it has a preliminary agreement to acquire Fishermen’s Energy, a project twice rejected by the state as too expensive under the Christie administration. Terms of the deal were not disclosed.
“It is a great project to get something built in his first term,’’ said Doug Copeland, regional development manager of EDF, referring to Murphy’s goal of having 1,100 megawatts of offshore-wind capacity built initially.
He and others associated with the project argued the proposal would easily meet a net economic-benefit test to allow it to move forward — even without a federal grant and other tax advantages.
“It will be a lot less than the only other demonstration project out there,’’ said Chris Wissemann, chief executive officer of Fishermen’s, referring to the 30-megawatt offshore wind farm near Block Island.
That may be so, but a bill being voted on today by lawmakers imposes a cap on the costs of new solar installations that ratepayers will absorb, but exempts offshore wind projects from the provision.