NJ Ready to Solicit Bids for 1,100 Megawatts of Offshore Wind

Solicitation expected to be just first step in realizing governor’s aggressive goal of 3,500 megawatts by 2030

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Wind power worker
The state yesterday took a significant step toward achieving its goal of developing a robust offshore-wind industry by offering the nation’s largest solicitation to build offshore capacity.

The unanimous action by the New Jersey Board of Public Utilities opens a window beginning Thursday for at least four developers to vie to build up to 1,100 megawatts of capacity off the Garden State’s coast.

More importantly, it commits the state to open up two additional solicitations within the next four years to reach Gov. Phil Murphy’s oft-stated goal of having 3,500 megawatts of wind capacity by 2030, enough to power, the governor claims, more than a million homes.

Growing the green-energy economy

The assurance sends a powerful signal to an emerging U.S. wind sector that New Jersey intends to become a major player in developing a domestic renewable-energy industry, one that could fuel a growing green-energy economy.

“In the span of just nine months, New Jersey has vaulted to the front of the pack in establishing this cutting-edge industry,’’ Gov. Phil Murphy said in a statement from his press office.

The aggressive timeframe was lauded by offshore-wind developers, clean-energy advocates, and lawmakers, who have waited eight years to move forward with offshore wind because of inaction by the Christie administration.

“This is really a significant achievement,’’ said Scott Weiner, a former BPU president and a lawyer now representing Deepwater Wind, one of the handful of developers likely to be part of the competitive process to build wind farms. They will seek to build a project off the coast of Cape May.

“What was described today was a very exciting and appropriate development that could jump start this industry,’’ Weiner said. Deepwater Wind operates the nation’s only offshore wind project along the Rhode Island coast.

Other states up and down the Eastern Seaboard are pushing offshore-wind projects, hoping to capitalize on an industry already well-established in Europe.

A very big wind

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If New Jersey’s program moves forward, along with New York and Massachusetts, it would mean that the U.S. offshore wind market is expected to reach more than 8 gigawatts (a gigawatt equals 1,000 megawatts), according to Liz Burdock, president and CEO of the Business Network for Offshore Wind.

In approving the solicitation, agency officials talked mostly about the economic benefits of offshore wind — creation of new jobs and less climate-changing pollution — than its impact on utility customers who will foot the bill.

“It’s not free,’’ acknowledged BPU president Joseph Fiordaliso, answering questions from reporters. “We’re trying to find the best possible deal for ratepayers.’’

Waiting to see the costs to consumers

How much it will end up costing consumers will not be decided until developers submit their applications. By opening up the window for the first solicitation, however, developers and commissioners said it would afford enough time for the projects to qualify for federal tax credits before they expire at the end of next year.

Those incentives could reduce the overall cost of the project by 12 percent, or as much as $300 million for offshore wind farms likely to cost in the billions of dollars.

The BPU will begin accepting applications from interested developers on Thursday and will continue to do so until December 28, 2018. The agency intends to make a decision by July 1, 2019, a date suggested by offshore-wind developers.

At least four developers who have secured leases from the federal government to build offshore-wind farms off the coast are expected to file applications. They include two who have secured leases off the coast of southern Jersey: Ørsted North America and U.S. Wind. The others are Deepwater Wind and Equinor, which has secured lease acreage off Asbury Park.

“It is exciting to see New Jersey setting forth ambitious, yet achievable offshore wind energy goals,’’ said Thomas Brostrøm, president of Ørsted North America.

“Climate change is a real, serious threat, and it is one we must tackle head on if we hope to leave an inhabitable planet to our children,’’ said Assemblywoman Nancy Pinkin (D-18), chair of the Assembly Environment and Solid Waste Committee.

Tough choices ahead

Despite the plaudits, the board still has tough decisions to make. The developers are not required to submit projected costs for transmission as part of the price they submit to the state. The agency has not yet decided how and who will build the lines to connect the power from the wind farms to the people and businesses that will use it.

The state yesterday also opened a new proceeding on a pilot offshore wind farm three miles off Atlantic City that it has blocked on two prior occasions because of projected high costs to ratepayers.

The latest project, now dubbed Nautilus, proposes to build a 24-megawatt pilot as a demonstration by EDF Renewable Energy and Fishermen’s Energy. It has been pushed by lawmakers who passed a bill directing the board to review it once again.