GSOE weighs NJ offshore IPL

Developer Garden State Offshore Energy (GSOE) has made no decision on whether it intends to request the US Interior Department to extend an interim policy lease (IPL) for wind energy research off New Jersey that is set to expire in October, an official tells Recharge.

GSOE, a joint venture of PSE&G Renewable Generation and Deepwater Wind, has deployed a meteorological buoy at the IPL site in federal waters. The buoy is collecting wind, wave and other “met” data.

Under regulations set by the Bureau of Ocean Energy Management (BOEM), the Interior Department agency that oversees offshore wind energy development in federal waters, GSOE must remove the equipment within one year of the lease expiration.

GSOE has proposed a 1GW nameplate capacity project off New Jersey that would be built in stages.

Deepwater chief executive Jeff Grybowski tells Recharge that GSOE expects to compete in any lease auction off New Jersey that BOEM today said would take place within a year.

BOEM has delineated a large Wind Energy Area off New Jersey’s coast that could be sub-divided into as many as four areas for a competitive commercial wind energy lease auction. Each area could support at least 500MW, according to a study done by the National Renewable Energy Laboratory.

However, Grybowski cautions that no offshore wind project can proceed there without the state awarding proposed Offshore Renewable Energy Certificates (ORECs) that 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.

With the OREC program seemingly dead in the water, private developers have questioned how BOEM could hold a lease auction. BOEM has sought to work closely with states under its “Smart from the Start” initiative to facilitate offshore wind development, a process that has generally worked well until now.