The New Jersey Board of Public Utilities on June 21 unanimously granted the state’s first award for offshore wind to the Ocean Wind 1,100-megawatt project.
The BPU said that its decision sets the record for the single largest award for offshore wind in the country to date and marks further progress toward meeting the state’s goal of 3,500 MW of offshore wind by 2030, and New Jersey Gov. Phil Murphy’s vision of 100 percent clean energy for the state by 2050.
The offshore wind application window opened on Sept. 20, 2018 and closed on Dec. 28, 2018. The BPU received applications from three offshore wind developers: Atlantic Shores Offshore Wind, a partnership between EDF Renewables and Shell New Energies; Boardwalk Wind, sponsored by Equinor; and Ocean Wind, which is backed by a memorandum of understanding between Denmark-based Orsted and PSEG Renewable Generation.
Evaluation criteria included offshore wind renewable energy certificates (OREC) purchase price, economic impact, ratepayer impact, environmental impact, the strength of guarantees for economic impact, and the likelihood of successful commercial operation.
The Ocean Wind project offered a first year OREC price of $98.10 per MWh. The levelized net OREC Cost– which represents the actual OREC costs paid by ratepayers after energy and capacity revenues are refunded to ratepayers – is estimated at $46.46/MWh, with an estimated ratepayer impact of a monthly bill increase of $1.46 for residential, $13.05 for commercial, and $110.10 for industrial customers.
The Board acted on the applications prior to July 1 in order to provide sufficient time for the winning bidder to qualify for federal investment tax credits that expire at the end of this year. It is estimated that these credits could save New Jersey ratepayers approximately 12 percent of the total project cost, the BPU noted.
Several other states pursuing offshore wind
Several other states are also pursuing offshore wind. In New England, Connecticut, Rhode Island and Massachusetts are making moves to spur the development of offshore wind projects.
In Maine, Gov. Janet Mills on June 19 signed into law legislation that requires the Maine Public Utilities Commission to approve a contract for Maine Aqua Ventus, the first of its kind demonstration project of floating offshore wind in the United States.
In New York, legislation recently passed by state lawmakers calls for the New York Public Service Commission to set up a program for utilities to procure 9,000 MW of offshore wind by 2035 by 2024.
In late 2018, the Bureau of Ocean Energy Management asked companies to indicate their interest in developing three areas off the coast of California. BOEM is part of the Department of the Interior.