The three offshore wind companies with the ability to build turbines off New Jersey and connect them to the state’s grid are keeping details of their projects under wraps for now.
They are in a competition for a ratepayer subsidy to build and run their facilities for 20 years, and that makes them cautious about describing the size and cost of their planned projects, where they will connect with New Jersey’s grid, and how they will minimize cost and maximize economic value to the state.
The applications are due to the state Board of Public Utilities by 5 p.m. Dec. 28. The companies say they are still developing their approaches.
U.S. Wind, which holds a lease to 343,833 acres in federal waters about 7 miles off Atlantic City, has been largely silent since winning its lease and did not respond to requests for comment. It is also building a 32-turbine wind farm about 17 miles off Maryland that is expected to come online in 2020 and produce 250 megawatts of electricity. That’s enough energy to power 76,000 homes and meet all of Maryland’s offshore wind goals.
Norway-based Equinor, which proposes to develop Empire Wind in federal waters about 20 miles from northern New Jersey and 15 miles from New York, will apply in both states, said spokeswoman Julia Bovey. She said her company holds the lease closest to the biggest power demand on the East Coast, and its lease area is big enough to serve both states.
“We are equally well suited to New York and New Jersey,” said Bovey. “We are lucky to be in the north, where New Jersey uses a lot more electricity.”
New York issued a draft of its request for proposals for offshore wind generation Thursday, Bovey said.
Equinor is involved in four offshore wind projects in the United Kingdom, one in Germany, and Empire, according to its website. Three of the U.K. wind farms use conventional, bottom-fixed turbines, while Hywind Scotland uses floating wind turbines.
Danish offshore wind energy giant Orsted, which has a lease for an area about 10 miles off Atlantic City, has opened a New Jersey headquarters in Atlantic City, held media events and has long made staff available for interviews.
Orsted senior policy advisor Elisabeth Treseder said she expects robust competition from anyone who can interconnect into the state.
But she said Orsted, which also holds leases off Massachusetts and Virginia, is excited to apply and feels its experience in Europe and Asia will serve it well. It runs more than 20 offshore wind farms worldwide, and was the first to retire a farm that had reached the end of its useful life.
The BPU recently opened a bid solicitation window for a company or companies to build 1,100 megawatts of offshore wind power and hook into the grid in New Jersey.
The BPU issued guidelines on how it will pick the winner in this first round of competition for Offshore Renewable Energy Credits, referred to as ORECs. Companies that can show the best cost-to-benefit ratio will win the right to be reimbursed by ratepayers for the cost of building and running their wind farms. The proceeds of the electricity they sell will be rebated to ratepayers, under the BPU plan.
The Bureau of Ocean Energy Management, part of the U.S. Interior Department, oversees all mineral and energy leases in federal waters, which run from three to 200 miles offshore.
“All three are in good standing with BOEM, and close enough to New Jersey,” said BOEM Public Affairs Specialist Stephen Boutwell about Orsted, U.S. Wind and Equinor.
Bovey and Orsted spokeswoman Lauren Burm said their companies are encouraged by New Jersey acting so fast to open the window to apply for the subsidy. The BPU has said it will decide on who will receive the first subsidies by July 1, 2019, which will allow the winner or winners to qualify for federal tax credits that could save ratepayers up to 12 percent on the cost of construction.
“Especially with the governor’s announcement that three procurements are taking place over the next five years, that certainty means developers now have a clear picture of what New Jersey’s plans are and can develop supply and project pipelines accordingly,” said Burm.
Murphy recently directed the BPU to open two additional 1,200-megawatt solicitations of offshore wind capacity – one in 2020 and another in 2022. The goal is to transform New Jersey into a 100 percent clean-energy state by 2050.
So if a company doesn’t win on this round, it will have two other opportunities in the near future.