New Jersey awarded its second offshore wind solicitation to two projects with a combined capacity of 2,658 MW Wednesday, giving developer Ørsted its second project in the state, and the other to a joint venture between EDF Renewables North America and Shell New Energies US.

The New Jersey Board of Public Utilities (BPU) said it concluded that it could create a more competitive wind sector and accelerate efforts to create an industry hub by assigning two projects.

The two projects will generate electricity equivalent to the amount needed to power 1.15 million homes. Ørsted’s Ocean Wind II, located about 14 miles from the New Jersey shoreline, will generate 1,148 MW and is expected to be completed in three phases in 2028 and 2029. Ørsted is also developing Ocean Wind, an 1,100-MW project off the state’s coastline. Atlantic Shores, by the EDF/Shell partnership, will generate 1,510 MW of electricity in a wind field between 10 and 20 miles off the Jersey Shore near Atlantic City, with completion expected in two phases, in 2027 and 2028.

New Jersey plans another four solicitations, scheduled every two years, to reach its goal of deploying 7,500 MW of capacity by 2035. The first and second awards, if completed, would account for about half the targeted capacity.  

State officials said the award was the largest offshore wind project award in the nation and described it as a major step forward in the state’s effort to reach the target of generating 50% of its electricity through renewables by 2030, and 100% clean energy by 2050. They also sought to cast it as a sign of the state’s strength in the East Coast’s rapidly growing offshore wind sector.

“Today’s award further solidifies New Jersey as an offshore wind supply chain hub,” Gov. Phil Murphy said in a release. “This award ensures that our investment in clean energy is also an investment in our communities and will generate good-paying, union jobs and bring valuable investments to New Jersey.”

Rapidly Growing Sector

The first commercial scale offshore wind energy project in the U.S., Vineyard Wind off the coast of Massachusetts, gained final permit approval from the Bureau of Ocean Energy Management (BOEM) on May 11.

The Biden administration has pledged to build 30 GW of offshore wind in the U.S. by 2030, and in March announced that it would open a new area, New York Bight, to offshore wind development between Long Island and New Jersey. New York has set a goal of generating 9 GW of offshore wind capacity by 2035 and has five projects in the works totaling 4.4 GW.

Before the board’s 5-0 vote on the two projects, BPU Commissioner Bob Gordon said the decision not only showed the state is serious about combating climate change, but also is “making a long-term commitment to offshore wind.”

“We want to build the regional supply chain here in New Jersey,” he said. ”We want to foster innovation and competition. We want to build a whole new industry and the jobs and the economic opportunity that come with it.”

In outlining their recommendation that the board back the two projects, BPU staffers said both will use the New Jersey Wind Port, a manufacturing and logistics hub for the offshore wind sector in Lower Alloways Creek in Salem County, and a monopile manufacturing plant under construction in the Port of Paulsboro.

Ørsted said it would build a nacelle manufacturing plant at the wind port with GE. David Hardy, CEO of Ørsted Offshore North America said the award of the latest project would strengthen the company’s ties to the state.

“We’re thrilled to grow this global industry alongside the state of New Jersey, as well as help all communities in the state benefit from the offshore wind industry,” he said.

Ørsted has financed and has equity interests in 24 offshore wind partnership worldwide, including the Block Island Wind Farm, the first commercial offshore wind project in the U.S.

The Atlantic Shores project, which has agreed to use union labor, will create a nacelle assembly facility at the state’s wind port. The developer will also collaborate on a project to research, monitor and analyze the deployment of hydrogen technology and natural gas blending.

“As offshore wind prepares to take off in the United States, this is a critical moment to lay the groundwork for workforce training and supply chain development,” said Joris Veldhoven, commercial and finance director at Atlantic Shores. “Our robust project includes a number of essential initiatives to train local workers and bring manufacturing jobs to the state.”

Both project developers will also contribute $10,000 per MW to a fund that is expected to accumulate $26 million for use on research initiatives and wildlife and fishery monitoring in the region, the BPU said.

Mixed Reception

In June 2019, New Jersey awarded its first offshore wind contract to Ørsted’s Ocean Wind project, which will be built 15 miles from Atlantic City. It is expected to begin operations in 2024, and is now quarter-owned by Public Service Enterprise Group (NYSE:PEG). (See Orsted Wins Record Offshore Wind Bid in NJ.)

The project has faced opposition from the tourism and fishing industries, as well as some residents, who are concerned about the impact. Yet state legislators showed their commitment to ensuring that offshore wind projects move ahead by passing legislation last week that would allow offshore wind developers to override local and state government to site transmission lines and related infrastructure for their projects on public land. The bill now sits on Murphy’s desk. (See NJ’s Offshore Wind Project Faces Criticism, Support and NJ Lawmakers Back Offshore Wind Bills)

The BPU opened the second solicitation last September, releasing a 142-page guidance document that outlined the requirements for companies looking to fulfill the offshore wind renewable energy certificate (OREC). BPU staffers said the two solicitations were evaluated through a variety of criteria laid out in state laws, including the projects’ impact on ratepayers, the economic benefits to the state, the environmental impact and the likelihood that the project would be brought to fruition.

The staff also looked at issues such as how the selection of a particular project would diversify the state’s risk in pursuing offshore wind projects, how they would spread the economic benefits around the state and how they would expand the supply chain for wind energy goods.

The projects will reduce greenhouse gas emissions by 5 million tons a year, equal to about 26% of the current green house gas emissions from electricity generation, the BPU said.

“These projects will go a long way toward helping New Jersey meet its long-term clean energy goals,” said Raymond Cantor, a lobbyist for New Jersey Business & Industry Association (NJBIA), one of the largest trade groups in the state. “We look forward to the creation of this new and dynamic industry.” Still, he added, “as we applaud the award of these projects, we are also mindful that we must still be vigilant to ensure that our electric grid remains reliable and that the energy we produce remains affordable.”  

Environment New Jersey and Sierra Club New Jersey also welcomed the BPU’s move, in part for the economic benefits and job creation it would bring to the state.

“With this procurement, New Jersey has continued to establish itself as a national leader in offshore wind,” said Taylor McFarland, acting director of Sierra Club New Jersey. “The clean energy boom is inevitable, and it is critical that New Jersey regulators are taking proactive measures to expand our offshore wind industry. This is the future, and we can either fall behind or stay ahead. I’m happy we’ve chosen the latter.”