Big Question For Offshore Wind: Who Gets Power To The Customers?

Tom Johnson | June 19, 2019 | Energy & Environment
As state BPU mulls three wind-farm projects, feds move to gauge industry interest in building a regional transmission system

Credit: Shaun Dakin/Unsplash
Offshore wind
The federal government wants to gauge the level of interest in developing a regional wind-power transmission system off the coasts of New Jersey and New York, a proposal kicked around in the past but never seriously pursued.

The U.S. Bureau of Ocean Energy Management announced late Monday it will publish a “request for competitive interest’’ in building a transmission line after a company, Anbaric Development Partners, LLC, requested a right-of-way to build a 185-nautical mile submarine version of such a system offshore.

The announcement comes as the New Jersey Board of Public Utilities is scheduled Friday to decide which of three developers, or combination thereof, will build up to 1,100 megawatts — and possibly more — of wind farms off the Jersey coast.

The action by the state board is significant in that it would mark the first approval of any offshore-wind capacity in New Jersey, a top priority of the administration of Gov. Phil Murphy, which aims to develop 3,500 megawatts of offshore-wind energy by 2030. The BPU expects to award additional contracts of 1,200 megawatts of capacity in additional solicitations in 2020 and 2022.

The three developers vying to build offshore wind farms are: Ørsted North America, a Danish developer proposing a project 15 miles off of Atlantic City; EDF Renewables/Shell New Energies, a French company seeking to develop a wind farm about eight miles north of there; and Equinor, a Norwegian firm pushing to build wind turbines 20 miles off the coast of Monmouth County.

Interest in future of wind power grows

There is intense interest in the BPU’s decision for many reasons, including whether it signals a major step forward in the governor’s goal to establish New Jersey as the pioneering hub of an emerging offshore-wind sector as states along the eastern seaboard race to develop wind farms. Only one small project is currently operating off Block Island in Rhode Island.

In recent days, the anticipation over which projects will be selected has led to speculation among clean-energy advocates that the state may expand the solicitation beyond 1,100 megawatts — a move that would allow the agency to award projects to more than a single developer.

The other big issue is expense. The state has declined to make the applications submitted by the developers public, saying they contain proprietary information. But the cost is expected to exceed billions of dollars at a time when utility bills are rising because of other mandates, including modernizing the existing land-based transmission grid, promoting renewable energy, and advancing energy-saving measures.

Each of the three companies is expected to build their own transmission lines to deliver the power to customers in the initial solicitation. Even so, the issue of whether a so-called backbone transmission system is needed to wheel power up and down the coast is one that has yet to be decided by the federal agency or state governments.

The issue of who builds the transmission system is important because it touches on a wide range of questions — which option is best for the environment, both on land and sea; what is the most cost-effective; and what is least costly for the customer, who ultimately pays the bill.

Offshore wind developers, like Ørsted, fear being held hostage to third-party developers, as they contend happened in Germany when the company had to wait two years to connect its wind turbines to land because of delays in building transmission connections.

But others argue bundling transmission with generation is costly because it limits competition. “It is important the system be competitive in all aspects, and that it be well-planned,’’ said Steven Goldenberg, an energy lawyer based in Red Bank.

System stretching from NJ to Long Island

In announcing the next steps for the proposed transmission line, Walter Cruickshank, acting director of the federal OEM bureau, said “offshore transmission infrastructure will be critical to the long-term success of the offshore wind industry.’’

The Anbaric application seeks to build as many as nine offshore collector platforms to collect and distribute power generated from future offshore-wind farms to up to six onshore landings, stretching from Long Island to southern New Jersey.

“A planned transmission system makes sense because it protects ratepayers, it promotes more competition and it’s better for the environment,’’ said Clarke Bruno, president of Anbaric, which is based in Massachusetts.

Doug O'Malley, director of Environment New Jersey
For the most part, clean-energy advocates who have pushed the state to promote offshore wind remain neutral on the transmission issue, but think it deserves deeper discussion.

“Clean energy only works if you get the power to the public on land,’’ said Doug O’Malley, director of Environment New Jersey. “We should be looking at all options on transmission.’’

In Massachusetts, state officials recently proposed exploring the creation of a single underwater transmission line from multiple offshore-wind farms there.