Global pacesetter Orsted swept the board by taking the whole 1.1GW awarded in the first offshore wind allocation off the US state of New Jersey.
Orsted will deliver power from its Ocean Wind project located in New Jersey waters, 24km off the coast of Atlantic City.
The Danish group was allocated the capacity after a competitive bidding round run by the New Jersey Board of Public Utilities (NJBPU), which announced the result on Friday.
Orsted came out the winner against rival bids from Norway's Equinor and a consortium of EDF and Shell in the largest chunk of US offshore wind yet awarded.
Presenting their reasons for selecting Orsted, state energy officials cited the Danish group's track record of delivery in the sector globally and the supply chain opportunities it offers, including creation of some 15,000 jobs across the project's lifetime.
Rachel Shifman, North America wind analyst at research group BloombergNEF, said the state may have wanted the reassurance that their first solicitation will be a success.
"Orsted has a proven global track record and, I would guess, was able to provide lower prices than competitors in this initial round of bids.
"During the hearing when results were announced, some officials voiced concerns about a lack of competition and stressed that future auctions would likely have more winners," Shifman added.
In an upbeat address as the winning project was announced, NJBPU president Joseph Fiordaliso said: "We are going to be the focal point for offshore wind on the East Coast of the US."
New Jersey has plans for two more rounds of 1.2GW as it pursues the overall goal of 3.5GW by 2030 set by Governor Phil Murphy.
State energy commissioners made it clear that they were keen to see competition in future rounds, and urged both Equinor and EDF/Shell to compete again.
Orsted offshore CEO Martin Neubert said: “We look forward to delivering Ocean Wind, which will be the first offshore wind farm in the US to cross the 1GW mark and will contribute significantly to meeting Governor Murphy’s ambitious renewable energy goals.”
Liz Burdock, CEO of business development body the Business Network for Offshore Wind, stated: “New Jersey’s announcement ... will accelerate the development of the supply chain and begin the process of bringing offshore wind manufacturing to New Jersey and the US.”
“The award of this long-term power purchase agreement means that Ørsted can now move ahead aggressively to develop the U.S. supply chain and start the process of ordering the towers, blades, foundations, cables, and hundreds of other parts and components that will be assembled into a massive wind farm,” she said.
Burdock noted that the bid award also meant the state's ambition to procure 3.5GW of offshore wind by 2030 was now “well under way”, with the next solicitation opening next year and the third Request for Proposal (RFP) going out in 2022.
“The scale of New Jersey’s award along with the state’s procurement schedule and transparent process also gives manufacturers the confidence needed to make the investments required to set up the a local supply chain and manufacturing,” she said.
Subject to a final investment decision, Orsted plans to commission Ocean Wind by 2024.
- With additional reporting by Darius Snieckus
