Offshore wind encounters turbulence over NJ 

The offshore wind industry’s troubles continue to pile up – not only in New Jersey but in neighboring states along the Eastern Seaboard.

On Wednesday, New Jersey Board of Public Utilities President Joseph Fiordaliso, perhaps one of the sector’s biggest advocates, let loose with an uncharacteristic rant at a developer in the emerging industry. Although he did not name the company, it was seen as a reference to Ørsted, which owns and is developing New Jersey’s initial offshore wind project.

Fiordaliso expressed frustration over repeated delays in moving forward with the project. “Your delays are intolerable,’’ he said. As was his custom, he had an offshore wind logo pinned on his suit.

“We cannot afford any more delays,’’ Fiordaliso said, adding there are no delays in the pace of climate change. “Some of the things that are being delayed are indefensible.’’

The agency, which is overseeing the state’s offshore wind efforts, also deferred action on a related issue that Brian Lipman, director of the Division of Rate Counsel, urged the regulators to delay. In a letter to the agency, Lipman said his office had no opportunity to assess the potential impact of a proposal to make changes in how the state connects electricity generated by the wind farms to the power grid.
Renegotiations and cancellations

In New York, Ørsted North America and Eversource Investment LLC, the partners in an offshore wind project, filed a petition to renegotiate their contract to build a 964-megawatt wind farm 30 miles off Long Island.

Meanwhile, a new study commissioned by SouthCoast Wind, an offshore wind developer in Massachusetts, found the cost of operating offshore wind farms has risen by 20% since 2019. It’s now seeking to terminate its agreement to purchase power it had signed with Massachusetts.

The problems encountered by the industry could pose a challenge to the efforts to quickly transition from fossil fuels to carbon-free electricity produced by the more than a dozen offshore-wind projects proposed by states along the Eastern Seaboard.

The Murphy administration has been pressed for a moratorium on offshore wind by local officials and some conservation groups who blame the sector for a wave of premature deaths of whales and other marine mammals washing up on beaches in the region. Scientists say there is no evidence linking the deaths with vessels conducting the offshore surveys needed to build wind farms.

Earlier this week, a new report issued by the Sweeney Center for Public Policy at Rowan University suggested the state could be losing ground to other states in attracting well-paying clean-energy jobs that a growing offshore-wind industry is expected to create.

Ørsted gets extra credits

The Murphy administration and legislative leaders have been discussing a bill to authorize Ørsted using all available federal tax credits for the wind project, which could help pay for a significant portion of its cost. New York and other states have allowed developers to take advantage of those credits.

Fiordaliso was not made available for questions, but his office issued a statement later in the day. “The board recognizes the unique challenges – including market and supply-chain factors  – confronting all our partners in offshore wind development. We will continue to work tirelessly alongside the developers to support solutions that help New Jersey realize its bold offshore wind development goals and achieve a 100% clean energy economy by 2035.’’

Ørsted said it is committed to delivering Ocean Wind, a 1,100-megawatt project 13 miles offshore, according to Maddy Urbish, head of government affairs and market strategy for the company.

“Today’s comments are unexpected, as we are and have worked closely with the BPU, NJ DEP and federal agencies throughout the development process to ensure the project moves forward in a responsible and expedient way despite early delays in federal permitting under the previous administration,’’ Urbish said in a statement issued by Ørsted.

Despite the conciliatory note struck by both, Fiordaliso’s caution against future delays was viewed as more threatening by some. “Basically, he told Ørsted to put up or shut up,’’said Jeff Tittel, a longtime offshore wind advocate, crediting Fiordaliso for recognizing the urgency to respond to climate change. “He’s drawn a line in the sand.’’

Others said the emerging legal tussles between developers and the state over contracts awarded several years ago are not surprising.

“This always has been one of the more expensive forms of renewable energy,’’ said Paul Patterson, an analyst with Glenrock Associates in New York City. “A lot of these initiatives haven’t shown up in customers’ bills.’’

In New Jersey, the costs are showing up in other areas. Lipman noted a transmission project to connect the wind farms to the existing power grid has increased 12% in recent months. The cost of building a single interconnection for early offshore wind projects in New Jersey rose from $1.01 billion to $1.91 billion after it was reviewed by PJM Interconnection, the operator of the nation’s biggest electric grid.