Governor Phil Murphy signed an executive order raising New Jersey’s offshore wind procurement goal from 3.5GW by 2030 to 7.5GW by 2035, setting the stage for likely heated competition among northeastern states for billions of dollars in future supply chain investment.

New York leads the nation with a 9GW offshore wind target by 2035, while Connecticut launched its first 2GW offshore wind request for proposals in August.

“We have an immense opportunity to maximise our potential and make this region – and, specifically New Jersey – the nexus of the global offshore wind industry,” he said.

New Jersey’s new target – no date was given to codify the target into law – will deliver enough capacity to enable it to meet as much as half of the 50% renewable energy goal by 2030 and a 100% clean energy economy by 2050, according to Murphy.

“There is no other renewable energy resource that provides us with either the electric-generation or economic-growth potential of offshore wind,” he said, forecasting that 7.5GW of offshore wind capacity will power more than 3.2 million homes and generate billions of dollars in investments there.

In June, the Board of Public Utilities (BPU) awarded Orsted a contract for an initial 1.1GW of capacity toward the original 3.5GW target, and proposed a timeline to consider two future 1.2GW solicitations in 2020 and 2022.

The Ocean Wind project, which will be located about 24km off Atlantic City, offered a first-year offshore wind energy credit (OREC) price of $98.10/MWh. Income from the remaining contract tenor was not made public.

The levelised net OREC cost - which represents the actual OREC costs paid by ratepayers after they receive capacity and certain other revenues - is estimated at $46.46/MWh over the contract life.

Public Service Enterprise Group, which owns the state’s dominant power utility and will build the project's onshore transmission infrastructure, has an option to acquire a 25% equity interest.

Orsted anticipates it will need up to two years to have all the permits in place, with the 90 GE Haliade-X turbines spinning by 2024. Ocean Wind is eligible for a 12% federal investment tax credit (ITC).

Additional lease areas necessary

The present three wind energy areas under lease to Orsted, the Shell-EDF joint venture and Equinor off the New Jersey coast do not have project pipeline nameplate capacity to meet the new offshore goal, according to the US Department of Energy (DOE).

Its numbers show Orsted’s zone has 847MW of capacity remaining; the Shell-EDF Atlantic Shores tract has potential 2.22GW nameplate capacity, and Equinor's had an initial 963MW with 816MW under contract by New York State.

Those estimates may be conservative. US Wind, for example, believes its lease area off the coast of Maryland has 1.3GW nameplate capacity versus DOE's 966MW, while Equinor claims 2GW.

The Bureau of Ocean Energy Management (BOEM), which oversees wind energy development on the outer continental shelf beyond state territorial limits, has not proposed additional areas for possible lease along the state's coast.

The New Jersey BPU does have the option of contracting offshore wind capacity from mid-Atlantic states that also form part of the PJM Interconnection regional electric grid or New York, which has its own grid.

Reaction

Today’s announcement will accelerate development of New Jersey's offshore wind industry and supply chain including manufacturing capability for components, according to Liz Burdock, chief executive of the Business Network for Offshore Wind, a non-profit dedicated to establishing a US offshore wind supply chain.

In response to Murphy's "lasting commitment" the industry welcomes that challenge and responsibility. "Now it’s up to the developers, manufacturers, regulators, suppliers and skilled labor force to make it happen,” she said.

Wind

New Jersey doubles offshore wind goal to 7.5GW by 2035