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BPU to solicit applications for offshore wind generation

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Developers will be able to submit applications via www.nj.offshorewind.com.
Developers will be able to submit applications via www.nj.offshorewind.com. - ()

New Jersey’s public utilities board will begin accepting applications on Sept. 20 to develop 1,100 megawatts of offshore wind.

Deadline for submissions is Dec. 28, with a public announcement of the designees set for next July 1.

The New Jersey Board of Public Utilities on Monday voted 5-0 to open the application period, the latest development in Gov. Phil Murphy’s goal for the state to develop 3,500 megawatts of offshore wind energy by 2030 and make New Jersey 100 percent reliable on clean and renewable energy by 2050.

At the Global Climate Action Summit last week in San Francisco, Murphy said he wants the board to open two 1,200 megawatt solicitations for offshore wind, one in 2020 and another in 2022.

“In the span of just nine months, New Jersey has vaulted to the front of the pack in establishing this cutting-edge industry,” Murphy said in a prepared statement. “We campaigned on rebuilding New Jersey’s reputation as a clean energy leader and that involves setting an aggressive timetable on offshore wind. Thanks to the board, today we took another enormous step toward realizing that goal with the largest single-state solicitation of offshore wind in the country.”

The July 1 deadline will enable the applicants to qualify for federal tax credits that would lower costs by as much as 12 percent. The investment tax credits are scheduled to sunset Dec. 31, 2019.

During 2018, the developers of the 25-megawatt Nautilus Offshore Wind Project are expected to be able to lower their costs by 18 percent due to the tax credits.

Applications will be judged on six criteria, according to Kenneth Sheehan, director of clean energy at the BPU: economic impact on the state, ratepayer impacts, environmental impacts, strength and guarantees of the economic impacts and the likelihood of successful commercial operation.

“It’s not just cost. There’s an expectation of the development of the supply chain, development of employment opportunities and other benefits to the state’s economy,” Sheehan said.

Applicants will also be judged based on the offshore renewable energy credit purchase price, which is how much of a ratepayer’s energy bill subsidizes the project.

Baked into the OREC purchase price, Sheehan said, are the transmission costs; that is, how much it will cost ratepayers to transmit electricity from the wind turbines into their homes.

That may end up being a separate application, Sheehan said, but for now developers have to include it in their submission to the BPU.

NJBPU President Joseph Fiordaliso said he didn’t have any projections on how much ratepayers will pay on their energy bill.

“It’s not going to be for free,” Fiordaliso said. “I think once we get those applications in, we’ll be able to have a better idea of what we’re talking about in dollars and cents.”

Currently, three private businesses lease from the federal government to develop offshore wind: Orested North America, U.S. Wind and Equinor, which the board said are likely to submit applications.

A fourth company, Deepwater Wind, was granted a lease by the federal government to develop wind off the Jersey coast, but it expired.

The BPU plans to unveil the website www.nj.offshorewind.com for developers to submit their applications.

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Daniel J. Munoz

Daniel J. Munoz


Daniel Munoz covers politics and state government for NJBIZ. You can contact him at dmunoz@njbiz.com.

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