BOSTON —
Offshore wind developers need to think on a larger scale than current projects in the pipeline when it comes to transmission planning, according to Nabil Hitti, director of U.S. business development for National Grid (NYSE: NGG).
“The existing plans and sizes are manageable, and the question is, ‘Can we go bigger?’” Hitti said at a panel for the American Clean Power Association’s Offshore WINDPOWER 2021 conference on Wednesday.
The U.S. Bureau of Ocean Energy Management this week set a goal to hold up to seven new offshore lease sales by 2025 to meet the Biden administration’s goal for 30 GW of OSW by 2030.
Coastal states are already facing the challenge of how to integrate existing OSW proposals into the transmission network, along with how to increase transmission capacity in general to “unlock the potential of renewables across the nation,” Hitti said.
BOEM is reviewing nine projects following its approval of the Vineyard Wind project off the coast of Massachusetts earlier this year.
Ocean Wind, the largest project under review with the agency, is expected to have a total capacity of 1,100 MW.
“PJM has been very helpful to us in trying to come up with the transmission that is going to provide the maximum rate of return for ratepayers,” Upendra Chivukula, New Jersey Board of Public Utilities commissioner, said during the panel discussion.
But New Jersey is at the forefront of issues with OSW interconnection, including establishing charges and costs, Chivukula said.
“Currently the planning system is fragmented, I think, due to transmission owners having incentives to construct and recover costs from transmission projects with little or no oversight,” he said. Those costs are then passed to ratepayers.
When developers approach state agencies for OSW renewable energy certificates, the “largest component of risk is associated with transmission costs,” said Tim Burdis, senior manager of policy solutions for PJM.
“You can quantify a lot of the other costs, but you don’t necessarily have specificity around what are going to be the upgrade costs that an ISO or RTO might be sticking with the bill,” Burdis said.
Transmission upgrade and replacement decisions in anticipation of a skyrocketing OSW industry need to be made now to save money and time on integrating the renewable resource, instead of “having to make a minimal upgrade and then come back later and make a bigger upgrade for OSW that wants to come on to the system,” Burdis said. “The state of public policy says it is going to be on in 10 years.”