Tom Johnson reports for NJ Spotlight
New Jersey is joining with the nation’s largest electrical grid operator to try to answer one of the big questions in offshore wind: how to bring the power from wind farms to customers at an affordable cost.
The agreement with PJM Interconnection, a regional grid operator the state has often battled with in recent years, will allow the New Jersey Board of Public Utilities to open a competitive bidding process early next year to build transmission facilities for future wind farms.
Such an arrangement is viewed by state officials as potentially a more cost-effective and environmentally benign way of bringing the wind energy ashore. It could also result in the building of an offshore wind transmission backbone that would allow developers to wheel power to where demand is the highest, one of the biggest disputes in advancing the sector.
Costs of coming ashore
The issue of transmission costs — the expense of bringing electricity onshore and the upgrades needed to the current transmission systems to accommodate more power on their lines — is one of the biggest unknowns in offshore-wind development. The solution has big implications for ratepayers, who will pay for those farms.
A study earlier this year by the Business Network of Offshore Wind projected if all of the offshore wind farms proposed in New Jersey and four other coastal states are built, it would result in offshore transmission costs of between $15 billion and $20 billion.
For years, some companies have advocated building an offshore backbone wind-transmission facility, including a Google-funded initiative for one stretching from Virginia to New Jersey. Without support from states, however, the project has been shelved, although other companies have proposed building it.
In New Jersey, the state’s first offshore wind farm will be a 1,100-megawatt facility off Atlantic City developed by Ørsted. The company will build its own interconnections with onshore transmission facilities, a model to be used in next offshore wind solicitation later this year.
State officials said the new approach will help ensure New Jersey achieves the goal of 7,500 megawatts of offshore wind energy by 2035. “By exploring offshore wind transmission options … we’ll work collaboratively with PJM to identify potential solutions that meets the state’s needs and ensure the best value for ratepayers,’’ said BPU President Joseph Fiordaliso.
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