In a step that could boost prospects for offshore wind projects up and down the Eastern Seaboard, bipartisan legislation has been introduced in Congress to extend lucrative tax credits to spur growth of the sector.
U.S. Reps. Bill Pascrell (D-NJ) and Peter King (R-NY) introduced a bill this week — identical to a bipartisan version pending in the Senate — that would extend “Investment Tax Credits” that are due to expire at the beginning of next year.
The credits are crucial to developers of the still nascent industry in the United States, reducing the costs of future projects, and by extension, for consumers or utility customers, who ultimately will foot the bill to build a robust offshore wind sector.
New Jersey is one of several states along the Eastern Seaboard with big ambitions to develop a vibrant offshore wind industry; by 2030, the state wants to build 3,500 megawatts of offshore wind capacity. The Murphy administration already has approved the state’s first offshore wind farm about 15 miles off Atlantic City, a project expected to be operational around 2024.
That $1.6 billion project by Ørsted is hoping to qualify for the expiring ITC credits, which shave roughly 12% off the cost of the project, a provision that could save ratepayers significant sums, according to officials.
“This game-changing legislation will help spur economic growth, provide more affordable electricity for consumers and combat the global crisis of climate change, all in one,’’ said Pascrell.
There is currently only one offshore wind farm operating in the U.S., a facility off Block Island in Rhode Island operated by Ørsted. There are at least 15 active offshore wind leases in federal waters and at least 14 states actively engaged in developing offshore wind projects, sometimes competing with their neighbors.
‘Critical to New Jersey’
“The development of the offshore wind industry is critical to New Jersey and other states transitioning to 100 percent clean energy,’’ said Gov. Phil Murphy in a statement. “With the potential of up to $70 billion in revenues in the offshore wind supply chain and tens of thousands of new jobs, it is vital to ensure that these projects have the resources to move forward.’’
Murphy apparently was referring to a University of Delaware study that recently projected offshore wind could provide up to $70 billion in revenues for businesses in its supply chain by 2030. The potential of creating a robust green-energy economy has driven coastal states to try and cash in on that growth all along the Eastern Seaboard.
“Our economy and our environment have enormous potential to benefit from offshore wind energy, and this legislation would enable us to more quickly and affordably seize that incredible opportunity,’’ said Matt Bearzotti, deputy legislative director of the Sierra Club. “Offshore wind is a critical piece of the clean energy pie, and tax incentives are a key way to scale the industry up so that it benefits working people and coastal communities.’’
Whether the legislation can make its way through a Republican-controlled Senate remains a question. But the bill’s backers are hopeful policy is transitioning to renewable energy sources like offshore wind.
“There’s real momentum to extend an Investment Tax Credit for offshore wind during this Congress and we’re working with a bipartisan group of leaders … to get this offshore clean energy boom started,’’ said Tom Kiernan, CEO of the American Wind Energy Association.
Companion legislation has been introduced in the Senate by Sen. Tom Carper (D-De) and Sen. Susan Collins (R-Me).