The New Jersey regulator did not pick winners to construct wind farms but did award more than a billion for a single transmission line to Monmouth County plus upgrades to PJM’s onshore electric grid
No deal on offshore power grid
By Tom Johnson, NJ Spotlight
A state agency held off, at least for now, approving projects aimed at bringing power from offshore wind farms to land, but it did allow for $1 billion to upgrade the existing power grid.
The Board of Public Utilities balked at the more expensive projects needed to begin building what is essentially a backbone transmission system off the coast to deliver power ashore. Instead, it opted to wait until federal financial incentives are available to defray the costs to utility customers.
A law signed by President Joe Biden this summer provides lucrative tax credits to operators of offshore wind farms, but those credits are not available to most transmission projects. Several developers had sought approval from the state to build offshore transmission lines from the wind farms to the grid.
Many clean-energy advocates contend a backbone offshore wind transmission system is the most cost-effective and least environmentally disruptive way of connecting offshore power to the customers who need it. By mid-century, offshore wind farms are supposed to provide 27% of the state’s electricity. No offshore wind farm is operating in New Jersey.
Future federal funds
In the board order approving the projects, BPU staff said the action positions the state to seek direct federal funding for future expansions of the offshore transmission grid, including the potential to award a full offshore-wind backbone in future solicitations.
“We’re not finished,’’ said BPU President Joseph Fiordaliso, who said the approved projects will minimize the impact on New Jersey’s coastline, avoiding multiple projects coming ashore at different landing points.
In what it billed as the first coordinated approach to bringing offshore wind power to the grid, the board approved a project proposed by Jersey Central Power & Light and Mid-Atlantic Offshore Development, the latter a joint venture of EDF Renewables North America and Shell New Energies U.S.
The project involves building a new substation at JCP&L’s Larrabee substation in central Jersey, a site designated as the single interconnection point for the initial offshore wind farms approved by the BPU. Eventually, the new substation is projected to be the interconnect for up to 6,400 megawatts of offshore-wind electricity.
Bottom line: Larrabee
The new substation at Larrabee and other upgrades there are projected to cost $504 million. Related upgrades to the existing onshore grid will add another $575 million, bringing the total cost to ratepayers of $1.08 billion, or $1.03 per month for the average residential customer.
The onshore grid upgrades will be built by Atlantic City Electric, Baltimore Gas and Electric, LS Power, Peco Energy Co., PPL Corp., PSE&G and Transource.
BPU doubles down on improving on-land transmission capacity for offshore wind
JCP&L and Shell-EDF tapped for New Jersey’s transmission-first offshore wind plan
By Ethan Howland, Utility Dive
Dive Brief:
- The New Jersey Bureau of Public Utilities on Wednesday approved a set of “transmission-first” projects to connect 6.4 GW of potential offshore wind to the grid after sorting through 80 proposals made by 13 companies.
- The BPU selected a $505 million proposal brought by Jersey Central Power & Light, a FirstEnergy utility, and Mid-Atlantic Offshore Development, a joint venture between Shell New Energies US and EDF Renewables North America, that will provide wind farms a shared connection point to the mainland. The BPU tapped other utilities and transmission companies to build about $575 million in other onshore upgrades.
- “This action reflects a milestone in the development of proactive ‘transmission first’ infrastructure development in the offshore space,” Rob Gramlich, president of Grid Strategies, said, noting the approach has been used successfully in West Texas, the Upper and Lower Great Plains, and parts of the Northwest and California.
Dive Insight:
While regions like New England are starting to consider a holistic approach to transmission development for offshore wind, New Jersey’s BPU approved a plan that will give multiple wind farms a pathway onto the state’s grid.
“The board finds that this ‘transmission-first’ approach to offshore wind, undertaken in partnership with its regional grid operator, PJM Interconnection …, will lower costs, reduce the chance of delays in offshore wind projects and minimize community and environmental impacts,” the BPU said in the decision.
The plan will save at least $900 million compared with each wind farm building its own transmission, Andrea Hart, the agency’s senior offshore wind program manager, said Wednesday during an agency meeting. The plan will cost the average residential customer $1.03 a month, according to the BPU.
The approved interconnection project, called the Larrabee Tri-Collector, was designed to take advantage of federal tax incentives that could be worth about $2.2 billion, according to Hart.
The BPU considered proposals for an offshore transmission “backbone” running in the ocean parallel to the state’s coast, but found its costs outweighed the benefits, Hart said. Backbone projects would connect offshore substations to each other to directly interconnect multiple offshore wind projects, according to the BPU.
The project and related grid upgrades will allow New Jersey to seek direct federal funding for future expansions of the offshore wind transmission system, including potential funding for a full offshore wind backbone, according to the agency.
The approved transmission plan could change if circumstances shift, Hart said.
The companies selected to build various upgrades to support the introduction of offshore wind onto the grid include JCP&L, Public Service Electric and Gas, LS Power, PPL, Transource Energy, and Exelon’s Atlantic City Electric, Baltimore Gas and Electric and Potomac Electric.
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