By 2035, New Jersey will have enough offshore wind turbines to power more than 3 million homes in the state and provide at least half of the electricity it needs.
At least that is the aggressive schedule the Murphy administration laid out last week to hold offshore wind solicitations every other year, from the third quarter of 2020 until the beginning of 2028.
If successful, the state will put in place 7,500 megawatts of offshore wind capacity, a goal Gov. Phil Murphy announced last November in an executive order to hit that target in just 15 years.
“By announcing this planned solicitation schedule, we are demonstrating to our partners in industry and labor that we are committed to implementing this project in a thoughtful way that ensures economic growth for New Jersey,’’ Murphy said in a press release his office issued Friday.
Ørsted operates the only offshore wind farm in the United States, a relatively small project three miles off Block Island in Rhode Island. The company also has rights to develop a 1,100-MW offshore wind farm about 15 miles off Atlantic City as the winner of New Jersey’s first solicitation last year.
“New Jersey opened the largest single-state solicitation. [Ørsted] is building a supply chain that will support projects up and down the east coast and is poised to double our offshore wind capacity,’’ said New Jersey Board of Public Utilities president Joseph Fiordaliso.
Certainty for developers, manufacturers, supply chain
The proposed schedule calls for the next 1,200-MW solicitation to be opened by this September, with an award made by the second quarter of 2021. Setting a solicitation schedule through 2035 provides a crucial level of certainty for developers, original equipment manufacturers and the supply chain.
So far, however, the economic benefits of developing a robust supply chain — a goal of states up and down the Eastern Seaboard — have yet to materialize in New Jersey. But an aggressive commitment to offshore wind is evident by the new schedule the governor laid out, according to clean energy advocates.
“This is really important,’’ said Doug O’Malley, director of Environment New Jersey. “It’s putting a calendar to the aspirations of the Governor’s goals. There’s no other state in the nation who has a solicitation locked in over the next decade or so.’’
To be responsive to the evolving market, the schedule has been developed to provide flexibility in terms of the amount being procured with each solicitation and the exact timeline, according to the Governor’s Office.
It cited a number of factors that could influence the timing and quantity to be procured, including transmission solutions and development schedule, the status of additional lease areas, permitting, port readiness, establishment of a supply chain, workforce training and cost trends.
The last factor is probably one of the biggest challenges, with much of the cost of offshore wind, grid modernization and a new way of financing solar projects likely to fall upon utility customers, who will mostly shoulder the burden of financing the clean energy transformation.
Ørsted, which won the state’s first offshore wind project, is projected to have it in commercial operation by 2024. According to the projected schedule, it will take at least five years from awarding of contracts to build the offshore wind farm.
Another issue the state faces is a proposal from the Federal Energy Regulatory Commission that would increase costs for cleaner energy, such as solar and offshore wind, under regulatory changes the agency is considering. Earlier this year, Fiordaliso warned the proposal could harm many of the state’s clean energy initiatives.