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Despite positive signs, future of New Jersey wind energy remains uncertain  

Credit:  By Alexi Friedman/The Star-Ledger | January 20, 2013 | www.nj.com ~~

Just after taking the stage last week to discuss the promise of wind energy in New Jersey, the chief executive for a coalition hoping to install five wind turbines off the coast of Atlantic City touted its “immense” economic benefit to the state.

The demonstration wind farm, which would power 10,000 homes and cost $200 million, will bring more than $150 million in economic activity to New Jersey and create 250 jobs, said Chris Wissemann, head of Fishermen’s Energy group. “This is what the stakes are,” he said.

Like other proposed wind energy projects in New Jersey, Wissemann’s will rely on “Offshore Renewable Energy Certificates” to recoup millions of dollars investors will have sunk into the project. Money from those so-called ORECs would be passed on to New Jersey ratepayers.

That has proven a major stumbling block, and one of the reasons holding up construction of wind farms like Fishermen’s Energy, to be located in state waters three miles from shore.

In a week when a Google-backed project for an offshore multistate wind power transmission line announced it would start in New Jersey and set its contractor as Bechtel – which built the Hoover Dam – a time line for windfarm installation in the Garden State remains elusive. Despite passing recent legislation that puts New Jersey at the forefront of wind energy development, the state has yet to adopt subsidy regulations for OREC awards, which may come at the end of the year, and federal officials have not granted offshore leases.

So far, Wisemann’s group has failed to convince the state Board of Public Utilities or the Rate Counsel that the project would be a net benefit for taxpayers, a requirement to qualify for the OREC rebate under the Offshore Wind Economic Development Act. That 2010 legislation created an incentive program for as much as 1,100 megawatts of offshore wind generation; Fisherman’s Energy would be just 25 megawatts. New Jersey’s Energy Master Plan calls for a minimum of 3,000 megawatts of offshore wind capacity to be developed by 2020.

“I think wind energy is a good thing but they have to be very careful about ratepayer subsidy,” said Stefanie Brand, executive director for the Rate Counsel, essentially the state’s watchdog. “Unless we are going to get a greater benefit than it costs us, money wise and environmental benefit, we can’t ask ratepayers to subsidize it.”

Fishermen’s Energy, whose website says it will begin construction this year, is still trying to convince the BPU about those benefits, which include “the value New Jersey can capture by being first,” Wissemann said. There are no U.S. offshore wind farms operating or under construction, although companies have been planning to install turbines at sea for more than a decade.

Jeff Tittel, director of the New Jersey Sierra Club, believes the state has been dragging its feet.

“The failure of New Jersey to develop its offshore wind regulations has not only hurt clean energy, but prevented thousands of jobs from coming to New Jersey,” he said. “Fisherman’s Energy has received federal approval but no state support or approval from the BPU for their small project off the coast of Atlantic City. The governor claimed the federal government was holding up offshore wind, but now we see that is not the case.”

The Board of Public Utilities is still formulating the OREC regulations, and will discuss the issue at a meeting in late February. Adoption of those rules could take several months, but may be completed by year’s end. Meanwhile, the BPU may begin accepting applications from more developers this summer, an official there said, and the federal government may award offshore wind leases in New Jersey by November 2014.
Despite the two major announcements this week, the Google-backed project for a $1.8 billion high-voltage transmission line off New Jersey’s coast has its own troubles.

The New Jersey Energy Link, which would run an underwater high-speed line from Jersey City down to Atlantic City, requires federal approval from grid operator PJM Interconnection before it can begin in 2016. Bob Mitchell, chief executive of the multistate project called Atlantic Wind Connection, said he remains optimistic the approval will come. “We have a strong argument going for us,” he said following the wind energy forum in which he also spoke. “People like to have their lights available. This line is a way to get more generation in the state, which it needs.”

Brand said she is more optimistic about the larger plans for windfarms in federal waters, more than 12 miles from shore. About a dozen groups have indicated interest in federal leases to construct windfarms there, and competitive bids for the ORECS should mean lower prices.

Last fall, Fishermen’s Energy and Garden State Offshore Energy, a collaboration between Deepwater Wind and PSEG Global, separately placed large buoys in federal water about 20 miles off Atlantic City to collect data for large scale windfarms. Even dropping the multimillion-dollar buoys in the water was a year-long process, and required federal money for the equipment.

“There’s no question the industry is in flux,” Brand said of the state’s wind energy plans. “There are a lot of steps and hoops that have to be jumped through, but it doesn’t help anybody to rush things through. We’re looking to produce clean energy for many years to come, so when construction does happen, it will have been done right.”

Source:  By Alexi Friedman/The Star-Ledger | January 20, 2013 | www.nj.com

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

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