The New Jersey Board of Public Utilities (NJBPU) unanimously granted the state’s first award for offshore wind to Ørsted’s Ocean Wind, giving the company the opportunity to build 1,100 MW of offshore wind in federal waters.
Today’s 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 Governor Phil Murphy’s vision of 100% clean energy for the state by 2050.
“Today’s historic announcement will revolutionize the offshore wind industry here in New Jersey and along the entire East Coast,” said Governor Murphy. “Building our offshore wind industry will create thousands of jobs, invite new investments into our state, and put us on a path to reaching our goal of 3,500 MW of offshore wind by 2030. This award is a monumental step in making New Jersey a global leader in offshore wind development and deployment.”
NJEDA Chief Executive Officer, Time Sullivan added that the newly created New Jersey Offshore Wind Supply Chain Registry will be a powerful tool for ensuring that New Jersey-based companies can take advantage of the opportunities created by these new offshore wind projects.
“Today’s action by the NJBPU represents a major milestone toward our goal of becoming the capital of the American wind industry,” said Sullivan. “Clean energy plays a significant role in Governor Murphy’s vision for a stronger and fairer economy, and we are thrilled to be partnering with the BPU and selected developers to advance this high-growth sector that will create thousands of good-paying jobs and supply chain opportunities.”
The offshore wind application window opened on September 20, 2018, and closed on December 28, 2018. The Board 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 Ørsted 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.
Ørsted’s 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 determined which project was most beneficial to the State of New Jersey. In selecting Ørsted’s Ocean Wind 1100 MW project, they concluded that:
- Ørsted’s Ocean Wind economic development plans were the most detailed and offered the most benefit to New Jersey. Its 1,100 MW facility is estimated to result in net economic benefits of $1.17 billion to the state. Ocean Wind also provided the strongest economic guarantees to ensure local content, including manufacturing.
- While all of the proposed projects would help New Jersey reduce greenhouse gas emissions, Ocean Wind’s environmental protection plan, including mitigation of environmental impacts, was most complete and most advanced; the developer’s experience in this arena further distinguished its application.
- Ørsted provides the best chance of successful development due to its depth of knowledge, as well as global and regional experience and advanced stage of planning.
Based on the analysis that Ørsted’s project offered the strongest contribution to New Jersey’s economy, combatted climate change, provided added reliability to the transmission network, and did so at the lowest reasonable cost and risk, the Board approved Ørsted’s application.
The Board acted on the applications prior to July 1 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.
“To help lessen the impacts of climate change and rising sea levels, it is critical that New Jersey develop clean energy sources that reduce the level of carbon in our atmosphere,” said Department of Environmental Protection Commissioner Catherine R. McCabe. “I am proud to lead the DEP in its partnership with the BPU to aggressively pursue Governor Murphy’s vision of expanding New Jersey’s offshore wind capacity, while ensuring that we continue to protect our coastal ecosystems and abundant fisheries.”
McCabe added: “Today’s announcement brings us one step closer to our clean energy future, will create new opportunities for economic growth, and furthers our mission of protecting New Jersey’s environment.”