ATLANTIC CITY – Ten years ago, New Jersey was poised to become the first state in the nation to build an offshore wind farm.
But by December 2016, Rhode Island had won the race and the Garden State missed out on a chance to build a new industry.
Now, Fishermen’s Energy’s proposed 24-megawatt, six-turbine demonstration project 3 miles off the coast of Atlantic City hangs in limbo.
“We just kind of ran out of time and ran out of money,” said Paul Gallagher, a local attorney and Fishermen’s Energy chief operating officer.
In 2014, the US Department of Energy had awarded Fishermen’s Energy a $47 million grant for its project with the stipulation to secure a power purchaser before the end of 2016. Gallagher said that Fishermen’s Energy was negotiating with an out-of-state community, but failed to nail down the agreement in time. The grant was rescinded.
“That was kind of keeping us on life support since the state of New Jersey denied us multiple times,” Gallagher said of the New Jersey Board of Public Utilities.
Operations were suspended in December and Fishermen’s Energy let all of its employees go. They closed their Atlantic City office in March, Gallagher said.
So what happened? Stakeholders blame a reverse in support from the state government, while the government maintains that the cost of producing the renewable energy was just too high.
Fishermen’s Energy seemed to have a bright future. The Cape May-based offshore wind developer was formed by principals from East Coast fishing companies with a goal to develop renewable energy working with not against local fishermen. It quickly set in motion plans to create a test site for wind energy and by 2012 was able to secure several key permits from the state and local governments.
The project seemed to have bipartisan support in the state government including from newly elected Republican Gov. Chris Christie who signed the Offshore Wind Economic Development Act in 2010 creating an offshore wind renewable energy certificate program (OREC).
“My administration will maintain a strong commitment to utilizing energy as industry in our efforts to make our state a home for growth, as well as a national leader in the windpower movement,” Christie said at the time.
But by 2016, the BPU had denied Fishermen’s Energy application two times due to the cost to the ratepayer, with unsuccessful appeals in both Superior Court and the state Supreme Court.
A final report issued by Fishermen’s Energy May 4 to the US Department of Energy says that the wind farm would have cost much less than Rhode Island’s project: $181 million versus a reported $343 million, respectively. The report states that “while New Jersey government was initially very supportive of offshore wind development, the administration’s policies evolved to remove its support for renewable energy development.”
Fishermen’s Energy’s concept was to build a small-scale wind farm before building a commercial size facility in order to learn and improve the industry. Taking cues from Europe, they looked to eventually reduce the price of the electricity generated.
New Jersey Sen. Jeff Van Drew said that while he supports renewable energy sources – he lives on a large property in Dennis Township with solar panels and wind turbines – regulators need to ensure that the ratepayers are protected from high costs. A Democrat in the Republican stronghold of Cape May County, Van Drew said his view on the issue of renewable energy is “a little bit complicated.”
“I think it requires a combination of energy sources and modalities to really supply the energy we need for the future,” he said.
Van Drew said natural gas is still cheaper for utility customers than wind.
State Sen. Jim Whelan, D-2nd, said that while natural gas is cheap to purchase, “and that’s great,” the jury is still out on the environmental impacts of natural gas and fracking, which is used to extract natural gas.
He that New Jersey missed out on a big opportunity when it comes to offshore wind by not fully supporting Fishermen’s Energy’s proposal.
“New Jersey would (have) become a hub for offshore wind up and down the Atlantic Coast,” Whelan said, lamenting that the state’s moment has probably passed.
Legislators who supported offshore wind envisioned turbine manufacturing and shipping facilities on the Delaware Bay and Atlantic City becoming a hub for maintenance.
“Unfortunately, I don’t think the governor shared that vision,” Whelan said.
Whatever the case, at one point, Christie did share that vision. In his first year in office, Christie outlined an energy policy emphasizing in-state production of renewable energy to spur job growth. He also signed an agreement with nine other East Coast governors establishing an “Atlantic Offshore Wind Energy Consortium” to coordinate offshore wind development.
Christie’s office deferred all comment to the BPU, which said that it has supported development of offshore wind, but that Fishermen’s Energy never provided a financially viable project.
“All I can observe is what was presented to us was not financially viable. And I know ultimately even the federal grant that they received would not have completely paid for the project,” said Mroz.
Mroz said offshore wind is an option for New Jersey with two federal leases about 10 miles off Atlantic City, but developers have much more work to do.
“They need to do a site feasibility study and they need to make applications to the grid operator PJM,” Mroz said, adding that both companies have asked for extension to March 2018. “We’re waiting for their work and the product of that work. And we’ve said we’ll take a next step when they come back with that information.”
Gallagher was concerned about the future of renewable energy in the United States with the stated goals of the Trump administration, as well as the US pulling out of the Paris Climate Agreement.
“I think there is a value in building small projects particular in New Jersey, where we really need to prove the governmental will to deliver,” he said.
Gallagher said Fishermen’s Energy is shopping around the company’s assets.
“I do think this project will get built by somebody some day, but I’m just less optimistic today that it will be us that builds it,” Gallagher said. “The bottom line is we’ll either sell it or, maybe in the next administration, revive it.”
|Wind Watch relies entirely
on User Funding