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Shell forms joint venture to bring offshore wind to Atlantic City

Two energy companies have acquired a 180,000-acre lease to plan an offshore wind farm off Atlantic City.

Shell New Energies and EDF Renewables jointly acquired the lease from the federal Bureau of Ocean Energy Management for a location 8 miles from the shoreline in federal waters on the U.S. Outer Continental Shelf, EDF said in a release.

The area has the potential to produce 2,500 megawatts of energy and power nearly 1 million homes in a population center with high electricity demand, EDF said.

“Gaining access to this acreage in New Jersey complements our successful entry to Massachusetts and our existing renewable generation business,” Dorine Bosman, vice president of Shell Wind Development, said in a statement.

A company in which Shell is a stakeholder recently won an auction for a lease to build a wind project off Massachusetts, according to Shell.

The announcement comes one day after the state rejected EDF and Fishermen’s Energy’s plans for a three-turbine, 25 megawatt demonstration project off the city’s coast. In its ruling, the state Board of Public Utilities said the proposal would be too costly compared to larger wind farms in the works.

Shell and EDF’s plans to build offshore wind along Atlantic City come as the state moves forward with an aggressive plan to develop 3,500 megawatts of offshore wind energy in New Jersey by 2030.

Up and down the East Coast, states are competing to develop offshore wind hubs that will create jobs and jumpstart local economies. Atlantic City has one of New Jersey’s first wind farms, the 7.5 megawatt Jersey-Atlantic Wind Farm that opened in 2005 on the grounds of the Atlantic County Utilities Authority’s wastewater treatment facility off Route 30.

Danish company Orsted, which developed the country’s first project off Rhode Island, has plans to jump into New Jersey’s burgeoning offshore wind industry as well. It wants to build a large-scale project 10 miles from Atlantic City.

All bid applications for the first 1,100 megawatts must be submitted to the BPU by the end of the month. And there will be more bidding to come: The BPU plans to open solicitations for an additional 1,200 megawatts in 2020 and 2022.