New Jersey’s Board of Public Utilities (BPU) voted to open the state’s third offshore wind solicitation Monday with a goal of doubling the state’s wind capacity, paying little heed to the opposition to already approved wind projects along the Jersey Shore.

The unanimous vote launched a solicitation period that will conclude at 5 p.m. on June 23, in what BPU President Joseph L. Fiordaliso said confidently would be “another step forward in making New Jersey the supply chain for offshore wind along the eastern seaboard.”

“There are forces out there who don’t want us to do this. But we’re going to do it,” Fiordaliso said. “Renewables are the wave of the future. And New Jersey, I’m proud to say, is leading the way.”

The solicitation guidance document seeks projects totaling 1.2 GW to 4 GW and adds that the BPU may award projects above or below the target. Applicants must submit a completed application form and an explanation of their project and investment in it, as well as an in-depth analysis of its economic impact on the state. Unlike earlier solicitations, applicants are also required to submit proposals for creating infrastructure to tie their projects and others in the ocean to the grid in New Jersey.

The BPU expects to award projects in the solicitation in the fourth quarter of this year and have them up and running by 2030.  

Seeking Competition

The solicitation comes nearly four years after the board approved its first offshore wind project, the 1.1 GW Ocean Wind, and two years after the approvals of Ocean Wind 2, with a capacity of 1,148 MW, and Atlantic Shores, with a capacity of 1,510 MW. (See NJ Awards Two Offshore Wind Projects).

The three projects, which total 3,758 MW, already are moving ahead. But Ocean Wind 1, because it is the state’s first offshore wind project, has faced the most opposition. Opponents include residents concerned about its impact on their ocean view, the commercial fishing sector, which worries that the turbines will reduce their access to fishing areas, and tourism interests fearful that the sight of wind turbines ten or more miles off the coast will deter visitors.

Most recently, local government officials have cited a spate of nine or so dead whales washing up on New Jersey as a sign that pre-construction sonic testing is potentially having a negative impact on marine life, although federal officials at the Marine Mammal Commission say there is no link in the deaths to any offshore wind work. Some opponents, and the New Jersey Division of Rate Counsel, have urged the state to slow the pace of OSW projects until environmental and other studies are finished, and the true impact of the turbines is known.

Before backing the project, Commissioner Robert Gordon noted the vigorous bidding war for offshore wind contracts in the New York-New Jersey Bight when it was held in February 2022; it resulted in combined bids totaling $4.37 billion. He said he is “very hopeful … that we will see many more applicants entering the market and promoting a more competitive market for offshore wind in New Jersey.” (See Fierce Bidding Pushes NY Bight Auction to $4.37 Billion.)

“What we are seeing today is yet another concrete piece of evidence of New Jersey’s long-term commitment to offshore wind,” he said. He added that the board’s solicitation document should persuade anyone “of our commitment to protecting both the ratepayers and the marine ecosystems off our coast.”

Disappearing Promises

In contrast, Commissioner Dianne Solomon, who also voted to open the solicitation, expressed reservations, especially the potential cost to ratepayers.

“It appears that with every solicitation promises are made that somehow disappear or we learn of increases in costs above and beyond that which we relied upon making our initial awards,” she said. “Now, I certainly understand within an enterprise of the scope and size of offshore wind, that there are bound to be challenges and changes. … But folks are relying on us to make prudent decisions that will forever impact the cost of energy here in New Jersey, not to mention the landscape and waters of our coastline.”

Solomon, noted that the solicitation allows the BPU to award a very large volume of new wind capacity, or none at all. “It is my hope that before the board approves the next project, we will have answers to the valid questions raised,” she said.

Fiordaliso, speaking after Solomon, said that in cooperation with the New Jersey Department of Environmental Protection, “we’re going to ensure the fact that the commercial fishing industry is protected, that the marine wildlife is protected. And that it’s going to be a boon economically for the state of New Jersey.”

He said that critics expressed similar concerns about the cost of solar power at the start of the century, when the state vigorously developed that sector, and the “cost of solar has greatly diminished.”

Submitting Small and Large Projects

Gov. Phil Murphy in September increased the state’s OSW target capacity from 7.5 GW by 2035 to 11 GW by 2040. A board award of 4 GW in the third solicitation would take the state to approved capacity of 7.58 GW. The state expects to hold three more solicitations, each for 1,200 MW, starting in 2023 and finishing in 2030.

Applicants must state the price ($/MWh) of Offshore Wind Renewable Energy Certificates (ORECs) at which they would complete their proposed project. The OREC price reflects project costs including equipment, construction, financing, operations and maintenance, and taxes, offset by any state or federal tax credits and other subsidies or grants.

The BPU is encouraging applicants to make several submissions, including at least one that will generate only 1.2 GW of energy, and others detailing larger projects.

The submissions must also detail the developers “proposed investment in New Jersey offshore wind infrastructure, supply chain, labor force development, other in-state investments, and how the proposed investment furthers the development of New Jersey as a regional hub for offshore wind.”

The document also demonstrates the state’s desire to maximize economic development, urging applicants to use the state’s infrastructure, such as the New Jersey Wind Port under construction in Salem County.

 “Applicants can further demonstrate commitment to in-state economic development by including incremental supply chain infrastructure as part of the proposed project(s). The state values the opportunity for new Tier 1 manufacturing facilities, specifically for full-scale manufacturing of blades or towers at the New Jersey Wind Port.”

Environmental groups welcomed the solicitation. The state branch of the Sierra Club released a statement, which also was supported by Environment New Jersey, saying the solicitation puts New Jersey at the “vanguard of a new clean, renewable energy industry that will drive workforce development and economic prosperity, shoreline protection, and marine and wildlife preservation.”