New Jersey approves new offshore wind farms
New Jersey regulators today approved more than 2,600MW of new offshore wind capacity, marking a major step forward for the nascent US offshore wind sector.
The New Jersey Board of Public Utilities (BPU) unanimously approved the 1,510 MW Atlantic Shores project, a partnership between Shell and developer EDF Renewables, and Danish developer Orsted's 1,148MW Ocean Wind II project as the winners of its latest offshore wind solicitation, bringing the state's planned capacity nearly halfway to its goal of 7,500MW of offshore generation by 2035.
"Today's award, which is the nation's largest combined award to date, further solidifies New Jersey as an offshore wind supply chain hub and leader in the offshore wind industry" in the US, governor Phil Murphy (D) said.
BPU projects the installations will be able to supply the equivalent of 1.15mn homes, and that the new generation will lead to a 5mn short ton/yr reduction in the state's greenhouse gas emissions, equal to about a quarter of New Jersey's current electric sector emissions.
This is Orsted's second wining bid in New Jersey. Its 1,100MW Ocean Wind project won the state's first solicitation in 2019. Ocean Wind II will get a 20-year Offshore Renewable Energy Certificate (OREC) contract that starts at $84.03/MWh. BPU said that will translate into a levelized net cost of $42.30/MWh once the OREC revenue is returned to ratepayers. The project is expected to be commissioned in 2029, Orsted said.
"We are thrilled to grow this global industry alongside the state of New Jersey, as well as help all communities in the state benefit from the offshore wind industry," Orsted Offshore North America chief executive David Hardy said.
The Atlantic Shores project will get an initial OREC price of $86.2/MWh, which BPU said means a levelized net price of $58.51/MWh when the revenue is returned to ratepayers. The project is expected to begin construction in 2024.
"We are thrilled to be moving forward with our project and cementing our commitment to deliver clean, renewable power and well-paid jobs to the Garden State for years to come," said Joris Veldhoven, commercial and finance director at Atlantic Shores.
New Jersey requires its electric suppliers to buy ORECs from approved offshore wind projects, which would then be retired to show compliance with the state's offshore wind generation mandates. The wind farms would be required to return the revenue they earn from operating in the PJM grid, such as from sale of power or capacity, back to New Jersey utility customers. Ratepayers would have a monthly surcharge added to their bills to help fund monthly OREC purchases.
New Jersey and other northeast states are leading the country in the push to build out the offshore wind industry.
To date, the US only has two small pilot projects in operation, off the coasts of Rhode Island and Virginia, but a number of utility-scale wind farms have been proposed along the Atlantic coast, largely in response to state mandates, with a pipeline already close to the 30GW by 2030 goal called for by President Joe Biden's administration, according to industry data.
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