The state yesterday began engaging stakeholders in how it should craft a strategic plan to develop a robust offshore-wind industry, a process some hope will make New Jersey the hub of an emerging sector of the green economy.
It won’t happen anytime soon. One offshore-wind farm developer acknowledged its proposed wind farm 20 miles off Sandy Hook probably won’t be operational until 2024, and even that projection is optimistic.
Others predicted it will take time to build the vibrant supply chain to deliver the economic benefits from what the Murphy administration touts as the most ambitious offshore-wind goals in the nation.
The strategic plan is supposed to map out how the state is to achieve the governor’s goal of building 3,500 megawatts of offshore-wind farms off the Jersey coast by 2030, a target some fear may spike already high energy costs for residents and businesses. A draft plan is expected to be done by next July — about the same time a state agency will decide which developers will build up to 1,100 MW in the initial step of a three-phase process.
The long-term perspective
So far, New Jersey seems to be getting things right, said developers and other clean-energy advocates.
Most of all, the state has gotten positive feedback for a long-term commitment by the administration to build 3,500 MW by 2030, a step that demonstrates New Jersey will follow up the initial 1,100 MW solicitation with two others of 1,200 each in 2020 and 2022.
“New Jersey is creating a predictable policy,’’ said Julie Bovey, an executive with Equinor, a Norwegian-based developer which hopes to develop offshore-wind farms off Sandy Hook and Long Island. “That’s something you can build an industry on and build a supply chain off.’’
Maciek Bury of the New Jersey Economic Development Authority, one of several state agencies participating in the development of the strategic plan, agreed. The governor’s 3,500 MW procurement schedule put New Jersey on the map, he said. “It lays out a long-term perspective.’’
Equinor is one of three developers expected to participate in the first solicitation put forward by the New Jersey Board of Public Utilities. The other projects are further south off the Jersey coast, near Atlantic City, and one off Cape May. The other developers include Ørsted, a Danish company that has emerged as the largest offshore-wind company vying to build facilities off the eastern seaboard, and U.S. Wind.
Who’s on first?
The state agency wants to decide which of those projects will move forward before July — a timeframe driven by a lucrative federal tax credit due to expire at the end of next year. The tax credit will reduce the cost of the electricity from wind farms to ratepayers, who will subsidize the energy, by about 12 percent.
The tax credit could save New Jersey ratepayers “hundreds of thousands of dollars, if not millions,’’ according to Anne Marie McShea, the offshore wind program director for the BPU.
Still, despite a huge drop in the cost for offshore wind in the last decade, it is expected to saddle energy customers with higher bills — at least in the short term.
“We understand costs may be higher going forward,’’ said Alan Shimada of Ramboll, a consulting firm helping to develop the strategic plan, but he noted the cost eventually will drop because the wind resources off the coast are free. “We need to diversify what we have now.’’
Energy pricing issues will be one of the primary focuses in developing the offshore-wind strategic plan, according to Shimada. The other two priorities will be developing a supply chain infrastructure and developing a workforce to be hired by the emerging sector, he said.
Another issue that will draw attention is not interfering with the region’s viable commercial and recreational fisheries and shipping sectors, panelists said. “It’s important not to lose important fishing grounds,’’ said Kevin Wark, who operates a fishing boat off Barnegat Light.