The offshore wind industry is facing new scrutiny as some initial proposals to build big wind farms off coastal waters are running into unforeseen fiscal challenges driven by high inflation, rising interest rates, and continued constraints in the supply chain.
Those factors have led one company to ask to renegotiate its contract to build a 1,200-megawatt offshore wind farm in Massachusetts, a bid so far rejected by regulators there. They have also spurred Public Service Enterprise Group to reconsider its 25% investment in Ørsted’s 1,100-MW project to be built 15 miles off the Atlantic City coast.
Whether those issues are significant enough to slow New Jersey’s aggressive push to be a leader in the emerging industry remains to be seen, but there are critics who hope it does.
“The dirty secret of offshore wind is the economics don’t make sense,’’ said Mike Makarski, a spokesman for Affordable Energy of New Jersey, an organization that has been a persistent critic of the Murphy administration’s plan to shift to 100% clean energy by mid-century.
“The returns on our U.S. projects, including Ocean Wind I (the first approved New Jersey offshore wind farm), are not where we want them to be,’’ said CEO Mads Nipper, but he added the company remains committed to those projects.
Ørsted, PSEG, and the New Jersey Board of Public Utilities have discussed the status of the Ocean Wind project, according to Joseph Fiordaliso, president of the BPU, the state agency overseeing the offshore wind initiative.
“Nothing is in jeopardy,’’ he said, making a statement about the potential setbacks at an unrelated BPU meeting earlier this month. “We all want to work it out. We will work it out.’’
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After months of review, the state is expected to announce today how it plans to bring electricity from yet-to-be-built offshore wind farms to homes and businesses in New Jersey over the coming decade.
The highly anticipated decision by the New Jersey Board of Public Utilities is crucial to the Murphy administration’s plan to rely on power from offshore wind turbines to smoothly transition the state away from its dependence on fossil fuels, which now provide more than 40% of electricity to customers.
Thirteen developers have submitted more than 80 proposals to the state agency as well as to the PJM Interconnection, the operator of the nation’s largest power grid. The projects vary in scale, scope and ambition.
Some involve upgrading existing onshore transmission lines at a cost of hundreds of thousands of dollars. Others envision building offshore substations and burying new transmission lines up to 50 miles or more off the Jersey coast in the New York Bight. The latter project is proposed by Ørsted/PSEG.
The 80 projects include those from Atlantic City Electric, Jersey Central Power & Light and PSEG, the owner of the state’s largest electric utility; offshore wind developers, and transmission companies. Depending on what and how many projects are selected by the BPU, costs are expected to run into billions of dollars, a cost ultimately to be paid by utility customers in New Jersey.
One unlikely outcome
The state also has the option to choose none of the projects, although most participants view that as unlikely.
“This is a big deal,’’ said Paul Patterson, an energy analyst at Glenrock Associates. “It is one of the most critical parts of offshore wind development. This is an issue not just for New Jersey, but for other parts of the country from Virginia to Maine.”
“This could set a road map for other states on how offshore wind can work,’’ said Doug O’Malley, director of Environment New Jersey and a longtime offshore wind advocate. “This has been a very, very competitive process.”
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Please join us for this NJ Spotlight News virtual roundtable as we discuss how the offshore wind industry can best bring wind power ashore while protecting public and business interests.
Opening remarks: Kris Ohleth, Executive Director, Special Initiative on Offshore Wind
Panelists: Janice Fuller, President, Mid-Atlantic, Anbaric Suzanne Glatz, Director of Strategic Initiatives and Interregional Planning, PJM Interconnection Doug O’Malley, State Director, Environment New Jersey Madeline Urbish, Head of Government Affairs and Policy, New Jersey, Ørsted
Moderator: Rhonda Schaffler, Business Correspondent, NJ Spotlight News
New Jersey has become a national leader of America’s budding offshore wind industry by committing to buying offshore wind power, building the first U.S. port for assembling giant turbines, and recognizing that its workforce needs to have the skills to serve the rapidly growing industry, government and business leaders said Thursday.
At a trade show panel titled “NJ Case Study: Build It and They Will Come,” officials examined whether New Jersey is laying the foundation for a sustainable offshore wind industry that others may emulate.
“What’s happened in New Jersey is, ‘This is what we want, we want some key manufacturing, we want port space, and we want to see it grow,’” said Doug Copeland, development manager for Atlantic Shores, which plans a 1,510-megawatt wind farm off Atlantic City and Long Beach Island.
Copeland praised New Jersey’s approach, which has the state committing to buying 7,500 MW of offshore wind power by 2035, and a combined public and private financial program to stimulate activity.
The federal government is speeding up its process of identifying and leasing ocean areas for generating offshore wind power because the industry is showing strong demand, and because of the urgency of the climate crisis, the government’s top offshore wind official said Wednesday.
Amanda Lefton, director of the Bureau of Ocean Energy Management, said officials will auction new wind-energy areas off the central Atlantic coast much more quickly than they did with areas in the New York Bight between New Jersey and New York.
Amanda Lefton
On Wednesday, the bureau called for public comments on six areas from Delaware southward that have the potential for offshore wind leases. After gathering comments from stakeholders including the commercial fishing industry, environmental groups, and the Department of Defense, the agency will identify areas for lease that it says will have the least impact on other ocean users.
The Atlantic lease areas eventually selected will be a fraction of the 3.9 million acres for offshore wind power that the agency announced Wednesday, but they are expected to contribute to the Biden administration’s ambitious goal of generating 30 gigawatts of offshore power by 2030, Lefton said. The new areas also include 1.1 million acres off the coast of Oregon.
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Gov. Phil Murphy’s new nominations to the Pinelands Commission have outraged environmentalists who said the new members would weaken environmental protections and make the 1 million-acre South Jersey preserve more vulnerable to development.
The critics said the nominees, all with corporate backgrounds, would replace three incumbents with long records as environmental advocates. These nominations, those critics said, are at odds with Murphy’s other policies of promoting clean energy and driving down climate-altering emissions.
In response to the storm of protest, the administration agreed Sunday to meet with the environmentalists on Monday to discuss the issue. The advocates consequently canceled a Monday news conference when they planned to urge Murphy to withdraw the nominations.
The newly re-elected governor on Thursday nominated Elvin Montero, deputy executive director of the Chemistry Council of New Jersey, a trade group, to replace Ed Lloyd, a retired environmental law professor who has sat on the commission since 2002.
Murphy also proposed that Davon McCurry, a government affairs official with the wind energy giant Orsted, should replace D’Arcy Rohan Green, an environmental advocate who has served on the Pinelands Commission since 2011.
And Laura Matos, an executive at Kivvit, a national communications and public relations firm, was nominated to replace Richard Prickett, a retired science teacher who joined the commission in 2012 and is its current chairman.
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New Jersey’s budding offshore wind industry got an official endorsement Thursday with a ceremonial groundbreaking for a new state-financed port that will serve as the host of turbines due for construction in the next few years.
Gov. Phil Murphy joined U.S. Labor Secretary Marty Walsh, senior state officials, federal and state lawmakers, trade unionists, and environmental activists to launch the New Jersey Wind Port where operators will marshal and assemble the components that make up the giant turbines.
The facility, on 200 acres adjoining the Salem County nuclear-power complex, will be the nation’s first purpose-built onshore site for servicing an industry that’s key to achieving the Murphy administration’s clean-energy goals, and contributing to a global target of cutting carbon emissions.
Just one week after the remnants of Hurricane Ida ravaged New Jersey with tornadoes and record rainfall, killing more than two dozen people, Murphy said the wind port showed that the state is serious about curbing climate change.
“That sort of reality may be part of our today, but we must do all that we can to prove our unwillingness to deny climate change,” Murphy said. He said the state should attack climate change “head-on” so that future generations can enjoy a habitable world.
‘Epicenter’ of offshore wind industry?
Murphy, a first-term Democrat running for reelection, said the port will establish New Jersey as the “epicenter” of America’s offshore wind industry and the focus of its supply chain.
“This location will provide essential staging, assembly, and manufacturing for the offshore wind industry, not just in Jersey, but up and down the East Coast,” Murphy said, next to a ceremonial sand pile lined with shovels and hard hats.
The project finally refutes a long-held argument that there’s a trade-off between job creation and environmental protection, considering projections that the port will create 1,500 permanent jobs, and hundreds more in the construction phase, Murphy said.
“What we are doing here today is not only creating jobs — overwhelmingly good union jobs — it is going to be perhaps our greatest stand against climate change,” Murphy said. “New Jersey is going to change the narrative: Fighting climate change and creating good jobs do go hand in hand.”
The state’s first commercial-scale wind farm, named Ocean Wind, is sited about 15 miles off Atlantic City, and is due to start delivering power by late 2024. The project will be managed by Denmark’s Ørsted, one of the world’s biggest offshore wind developers, and is 25% owned by the PSEG energy company. It will generate 1,100 megawatts or enough to power around 500,000 homes.
Next up, another wind farm
It is due to be followed by Atlantic Shores, starting in 2024, a wind farm between Atlantic City and Barnegat Light. The project would generate 1,510 MW, or enough to power some 700,000 homes.
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ATLANTIC CITY — New Jersey lawmakers are considering a law that would fast-track offshore wind energy projects by removing the ability of local governments to control power lines and other onshore components.
The bill, introduced last week and advanced Tuesday, would give wind energy projects approved by the state Board of Public Utilities authority to locate, build, use and maintain wires and associated land-based infrastructure as long as they run underground on public property including streets. (The BPU could determine that some above-ground wires are necessary.)
It appears to be an effort to head off any local objections to at least one wind power project envisioned to come ashore at two former power plants, and run cables under two of the state’s most popular beaches.
At a virtual public hearing in April on the Ocean Wind project planned by Orsted, the Danish wind energy developer, and PSEG, a New Jersey utility company, officials revealed the project would connect to the electric grid at decommissioned power plants in Ocean and Cape May counties.
The northern connection would be at the former Oyster Creek nuclear power plant in Lacey Township; the southern connection would be at the former B.L. England plant in Upper Township.
Cables running from the wind farm, to be located between 15 and 27 miles off Atlantic City, would come ashore at one of three potential locations in Ocean City: Fifth Street, 13th Street or 35th Street. They would then run under the road along Roosevelt Boulevard out to Upper Township and the former power plant, which closed in 2019
Cables also would need to cross Island Beach State Park in Ocean County, running under the dunes and beach and existing parking lots, out into Barnegat Bay, coming ashore either directly at the Oyster Creek site in the Forked River section of Lacey, or at either Bay Parkway or Lighthouse Drive in Waretown.
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With New Jersey’s target of delivering 7,500 megawatts of offshore wind capacity by 2035 and its aim of becoming the east coast’s wind manufacturing hub, the state is ramping up development activities in this clean energy sector.
Among next steps are the New Jersey Board of Public Utilities plan to hold a solicitation for a second offshore wind project and development of the New Jersey Wind Port in Salem County as the nation’s first purpose-built offshore wind marshaling port.
While these steps are integral to New Jersey’s goal of blunting the most severe impacts of climate change, questions exist regarding offshore wind implementation and impact. Among them:
To what extent can offshore wind deployments reduce dependency on carbon-intensive energy sources in the battle against climate change?
How will the offshore wind sector drive economic development and jobs creation in the state?
What are the visual effects of wind turbines on New Jersey shoreline and will they affect tourism?
How to address concerns about the impact of offshore wind installations on the commercial fishing industry?
Please join us for this NJ Spotlight News virtual roundtable as we discuss with experts how the offshore wind industry can advance in New Jersey while also protecting other business and public interests.
Opening remarks:
David Hardy, Chief Executive Officer, Ørsted Offshore North America
Panelists:
Governor James J. Florio, Founding Partner, Florio Perrucci Steinhardt Cappelli Tipton & Taylor, Senior Fellow, Public Policy and Administration, Edward J. Bloustein Graduate School of Public Policy, Rutgers University
Dr. Josh Kohut, Professor, Center for Ocean Observing Leadership, Rutgers University
Kris Ohleth, Executive Director, Special Initiative on Offshore Wind
Doug O’Malley, State Director, Environment New Jersey
Moderator: Tom Johnson, Energy & Environment Writer, NJ Spotlight News
Opposition to New Jersey’s coming surge in offshore wind farms is growing at the Jersey Shore.
The hundreds of wind turbines due to be built up to 20 miles off New Jersey in the next five years or so will spoil ocean views, undermine local economies and hurt wildlife while boosting the profits of overseas developers, critics say.
These opponents reject claims by wind farm builders and their enthusiastic supporters, including Gov. Phil Murphy, that the clusters of turbines are emissions-free. The manufacture and maintenance of the massive steel structures will require huge amounts of fossil fuel-powered energy, they argue.
They also say they fear that the tourism-dependent economies of many Shore towns will be damaged if visitors flee because they don’t want to look at an array of wind turbines on the horizon, or if the new structures disrupt marine life so much that recreational and commercial fishermen stay away.
And if fewer people want to spend time at the Shore, real estate values of coastal properties will drop, the critics predict.
“If people decide they don’t want any part of coming here, they will go elsewhere,” said Suzanne Hornick, administrator of SaveourshorelineNJ, a Facebook page that’s dedicated to opposing the industry, and has about 3,100 members.
Hornick, who lives in Ocean City, said she fears the town will be devastated by wind farms. “If tourism, and recreational and commercial fishing collapses then our restaurants collapse and our schools go to hell and the next thing you know people move off the island, and you have no community at all,” she said.
Critics are focused on Ocean Wind, a planned wind farm that will consist of about 100 turbines about 15 miles off Atlantic City. The project, New Jersey’s first, is due to generate 1,100 megawatts (MW), or enough to power about 500,000 homes, starting in 2024.
The developer, Denmark’s Ørsted, says visibility of the turbines from the shore will depend on atmospheric conditions. But Hornick said Atlantic City’s tallest building, the former Revel casino, is clearly visible from Ocean City, 16 miles away, or about the same distance as the Ocean Wind turbines will be from the Jersey Shore.
Afraid the turbines will be eyesores
At some 850 feet tall, the turbines planned for Ocean Wind will be higher than the 735-foot casino building, and so will be an eyesore on the horizon, she said.
At night, the wind farm will be lit to warn ships and air traffic of their presence, and that will be another visual violation, Hornick said. “These things are going to be so brightly lit, it’s going to look like an industrial park. The days of moonlight beach strolls are gone, and that’s not OK with us.”
But the visual impact could be reduced using lights that only come on when they are activated by radar from nearby ships or airplanes, according to Atlantic Shores, another project planned for an area between Atlantic City and Barnegat Light on Long Beach Island. That project, a 50-50 joint venture between Shell New Energy and EDF Renewables, is being reviewed by the Board of Public Utilities, and could generate up to 2,300 MW starting in 2027.
The two New Jersey projects are among 15 that are currently proposed for the northeastern and mid-Atlantic coasts. On Monday, the federal Bureau of Ocean Energy Management said it has completed its environmental review of Vineyard Wind, an Ørsted project off the coast of Massachusetts that is likely to be the first U.S. commercial-scale wind farm to begin operating. Advocates said the announcement was a sign that the Biden administration is serious about kick-starting the offshore wind industry after years of delay.
Seven East Coast states including New Jersey have committed to buying more than 28,000 MW of offshore wind power in the next 15 years, and some power-purchase agreements such as that for Ocean Wind, have been signed.
Asked how the European offshore wind industry has been able to overcome any environmental or economic problems since becoming established some 20 years ago, Hornick said she believes that Europeans are more likely to accept what their governments tell them than are Americans.
Distance makes a difference
Despite concerns about damage to tourism, research from the University of Rhode Island into the effects on tourism of a small wind farm — the first of its kind on the East Coast — that has been operating off nearby Block Island since 2016 found that occupancy and revenue increased on the island after the wind farm was built because visitors wanted to see it for themselves.
And a University of Delaware study last year found that tourists have fewer problems with offshore wind farms the further away they are. Twenty-nine percent said they wouldn’t visit the beach if turbines were 2.5 miles away but only 5% said they would be put off if the farm was 20 miles away — the outer limit for the Atlantic Shores project.
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New Jersey’s first offshore wind farm will also be among the first in the world to be powered by the biggest and most powerful turbines ever built, the project’s developer said.
Ocean Wind, a planned farm about 15 miles off Atlantic City, is due to start operating in 2024, using as many as 99 Haliade-X turbines — giant machines that will tower 853 feet (260 meters) above the ocean’s surface, using blades that are 351 feet (107 meters) long, and can each generate enough electricity to power 16,000 homes.
The technology, built by GE, has a working prototype near the Port of Rotterdam in The Netherlands, but it hasn’t yet been commercially deployed. The turbines are also scheduled to be used for the planned Skipjack wind farm — much smaller than the New Jersey project — off the coast of Maryland, that is expected to start operating by the end of 2023.
GE says each of the turbines, each with a 12-megawatt (MW) capacity, can generate emissions-free electricity that equates to taking 10,000 cars off the road annually.
Reducing costs, environmental impact
Building bigger turbines helps offshore wind developers to cut their costs and install fewer of the machines. “The industry trend is to use larger offshore turbines to reduce cost and environmental and visual impacts,” said Gabriel Martinez, a spokesman for the Danish company Ørsted, which is developing several wind farms off the U.S. East Coast, including Ocean Wind.
The project is designed to generate 1.1 gigawatts (GW), or about one-seventh of New Jersey’s 7.5 GW goal for total offshore wind power by 2035, as set by Gov. Phil Murphy. Murphy has said he wants New Jersey to achieve 100% clean energy by 2050, and about 18% of it would come from offshore wind if the 7.5 GW target is hit. That would be enough to power almost all (94%) of the state’s homes, according to the Board of Public Utilities.
Underscoring the importance of offshore wind in the overall clean-energy goal, Murphy has also announced the construction of a state-owned wind port where turbine components would be made and assembled, serving the growing wind industry off New Jersey and throughout the East Coast. In December, Murphy also highlighted a new privately owned $250 million factory at Paulsboro for construction of turbine towers, or “monopiles.”
The U.S. industry’s growth is being underpinned by the commitment of seven East Coast states to buy offshore wind power. Collectively, the states have agreed to buy 24 GW of offshore power, or about three times New Jersey’s goal, by 2035, according to a study by the University of Delaware✎ EditSign (UD) in 2019. New Jersey’s goal is the second-largest after New York, which has committed to buying 9 GW. Just one East Coast wind farm, a small project off Rhode Island, is currently operating, generating 30 MW.
Despite the states’ support, operators like Ørsted are investing billions of dollars in the industry, and so want to start getting revenue by producing power as soon as possible, said Willett Kempton, a UD professor who oversaw the study.
‘A race to turn on the power’
“They’ve all got tens of billions of dollars in each of these projects, and that’s just burning a hole in your payments every month,” Kempton said. “Until you’ve got all the paperwork and the engineering done and you throw the switch and you are online, you’ve just got money going down the toilet. So they are all in a race to turn on the power.”
He argued that the rush to recoup investment is leading operators to take a chance with new technology like the Haliade-X rather than waiting to see if it is commercially and technically successful over a long period, as the industry has done in the past.
“If you talk to people who have been building wind farms for 20 years, they will say, ‘Don’t use a new turbine; you want a turbine that has been in another 20 wind farms already because that one is not going to have any problems,’” Kempton said.
Kempton, an advocate for offshore wind, said it’s not clear that the operators using the giant turbines are confident in the technology’s success but are pushing ahead anyway for commercial reasons.
“I don’t think they are confident,” he said. “They would be going against 20 years of experience but it is so much lower cost that they are willing to take that risk.”
New Jersey’s first offshore wind farm will also be among the first in the world to be powered by the biggest and most powerful turbines ever built, the project’s developer said.
Ocean Wind, a planned farm about 15 miles off Atlantic City, is due to start operating in 2024, using as many as 99 Haliade-X turbines — giant machines that will tower 853 feet (260 meters) above the ocean’s surface, using blades that are 351 feet (107 meters) long, and can each generate enough electricity to power 16,000 homes.
The technology, built by GE, has a working prototype near the Port of Rotterdam in The Netherlands, but it hasn’t yet been commercially deployed. The turbines are also scheduled to be used for the planned Skipjack wind farm — much smaller than the New Jersey project — off the coast of Maryland, that is expected to start operating by the end of 2023.
GE says each of the turbines, each with a 12-megawatt (MW) capacity, can generate emissions-free electricity that equates to taking 10,000 cars off the road annually.
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