The Murphy administration’s plan to spend $200 million to upgrade a new port in South Jersey to serve the offshore wind industry is being touted as a step toward making New Jersey a hub of the fast-growing sector.
The commitment, proposed by Gov. Phil Murphy last week in his budget for the fiscal year that begins in July, also not so coincidentally matches what New York is offering offshore wind developers to build out ports in the Empire State.
The actions illustrate the stakes of the increasing rivalry and the costs arising for states along the Eastern Seaboard all pivoting to grab their share of new jobs, increased tax revenue, and other benefits from transitioning to a cleaner way of producing electricity for their residents and businesses.
‘Hub of the industry’
“It (New Jersey) is not the only state to have this dream of being the hub of the industry,’’ said Paul Patterson, an energy analyst for Glenrock Associates in New York. “One wonders just how many hubs there will be. I am a bit skeptical about it.’’
In the case of New Jersey and New York, it seems particularly competitive. New Jersey doubled its goal of building offshore wind capacity from 3,500 megawatts to 7,500 MW by 2035. In New York, Gov. Andrew Cuomo has established a goal of 9,000 MW of offshore wind, also by 2035.
In January, New York awarded Equinor, an offshore wind developer, agreements to build two projects amounting to 2,490 MW off the state’s coast. The agreement also includes $200 million in grants to build out facilities at the South Brooklyn Marine Terminal and the Port of Albany to serve the offshore wind sector.
New Jersey is planning two ports
This spring, New Jersey expects to award its second offshore wind project, anticipating it could amount to 2,400 MW, double its initial allocation in 2018.
New Jersey also is planning two ports to serve offshore wind developers, one in Paulsboro, where a company has pledged to invest $250 million to build towers for offshore wind projects, and the other in Salem County on Delaware Bay, where a new port to serve the sector is being built.
The New Jersey Wind Port, on Artificial Island where three nuclear power plants are located, is targeted to receive the $200 million out of the general fund in Murphy’s $44.8 billion proposed budget. Lawmakers hardly blinked an eye at the proposal, even though it is a significant expenditure in the midst of an economic downturn and public health crisis.
Offshore wind advocates, however, praised the investment.
“This is a once-in-a-generation opportunity for the nation and it is a long-term economic investment to be a leader in offshore wind,’’ said Brandon Burke, policy and outreach director of the Business Network for Offshore Wind, a nonprofit dedicated to advancing offshore wind development and its supply chain.
The significant investment by New Jersey is a clear signal that it is a place where it wants to locate manufacturing operations, Burke said. The state hopes to attract manufacturers to provide the cables, foundations and other necessary components of an offshore wind farm to the 200-acre site.
Atlantic Shores Offshore Wind, one offshore wind developer seeking to win approval for its project this spring, agreed. The company is a 50/50 partnership between Shell New Energies US LLC and EDF Renewables North America.
“The development of the New Jersey Wind Port in Salem County will help ensure the state is a hub in the emerging offshore wind supply chain,’’ the company said in a statement. “As Atlantic Shores, we aim to make use of the offshore wind port for our marshalling and supply chain efforts, as part of our project(s) under evaluation by the New Jersey Board of Public Utilities.’’
Construction is planned for two phases for the port, beginning later this year. The $200 million targeted from the budget is intended to facilitate physical development of the port, according to Shawn LaTourette, acting commissioner of the state Department of Environmental Protection.
The initial phase involves a 30-acre site for marshalling activities where wind turbines and towers, also called monopiles, will be assembled.
“This is an important down payment,’’ said Jeff Tittel, New Jersey Sierra Club director, of the proposed $200 million expenditure in a budget that now must be approved by the Legislature. “The fact they put this money up shows how serious New Jersey is and it will attract other investment to the port.’’