US to auction New Jersey offshore

The US Interior Department (DOI) is proposing to auction commercial wind energy leases within a 344,000-acre (1,392sq km) area in federal waters off the coast of New Jersey.

DOI seeks to auction the Wind Energy Area (WEA) as two leases: a South Lease Area comprising 160,480 acres and a North Lease Area covering 183,353 acres.

DOI’s Bureau of Ocean Energy Management (BOEM), which would oversee a likely competitive auction, will public the Proposed Sale Notice in Federal Register on Monday.

This will open a 60-day public comment period ending on 19 September. BOEM will review all feedback before publishing a Final Sale Notice that will announce the time and date of the lease sale.

The Proposed Sale Notice also provides detailed information concerning the areas available for leasing, the proposed lease provisions and conditions, auction details (i.e. criteria for evaluating competing bids and award procedures) and lease execution. 

The end of the comment period also serves as the deadline for any companies wishing to participate in the lease sale to submit their qualification package, if they have not already done so.

The WEA may be able to support up to 3.4GW of commercial wind generation, enough to power about 1.2 million homes, according to a study done by the US National Renewable Energy Laboratory.

BOEM identified the WEA in consultation with members of its New Jersey Intergovernmental Renewable Energy Task Force, which includes federal, state, tribal, and local government partners.

“We are another important step closer to harnessing the enormous potential of wind energy off New Jersey’s shores,” says Interior Secretary Sally Jewell.

DOI’s decision to move ahead with an auction comes amid concerns from developers that no project can proceed until New Jersey awards proposed Offshore Renewable Energy Certificates (ORECs) – a process that has dragged on for more than three years.

The ORECs would incentivize 1.1GW of offshore wind energy by 2020. New Jersey has yet to initiate a solicitation for ORECs.

The 2010 Offshore Wind Economic Development Act (OWEDA) designated the New Jersey Board of Public Utilities (NJBPU) to draw up the OREC program and regulatory process for awarding them to wind farm operators on a megawatt-hour production basis.

Investor-owned utilities in the state would be obliged to purchase both electricity from the offshore facilities and ORECS, which they could use to help comply with New Jersey’s renewable portfolio standard.

The OREC program stalled after NJBPU twice rejected an application submitted by Fishermen’s Energy to become the first offshore wind developer to qualify (its project would be located in state waters). Fishermen’s is suing NJBPU over its latest decision, which has thrown a wave of uncertainty over New Jersey’s potential offshore wind industry.

To date, BOEM has awarded five commercial wind energy leases off the Atlantic coast. It expects to hold additional competitive auctions for wind energy areas offshore Maryland in August and Massachusetts in the coming year.