New Jersey has revised its strategy for building the infrastructure to link offshore wind (OSW) projects to the grid onshore, abandoning a plan to have the developers in the state’s third solicitation submit connection proposals along with their wind farm plans.
Instead, the New Jersey Board of Public Utilities (BPU) on Oct. 25 agreed to split off the connection infrastructure part of the project from wind farm development and hold a separate solicitation for the infrastructure work. The wind farm solicitation, which is expected to be concluded with project selection in early 2024, will continue as planned.
Jim Ferris, deputy director of the agency’s division of clean energy, said that after reviewing the infrastructure component of the four bids submitted in the OSW solicitation, his staff concluded the original plan “imposes an unreasonable burden” on ratepayers. Splitting the two would increase competition by allowing infrastructure proposals from developers who had not submitted an OSW generation project, he said.
The BPU’s 4-0 vote — one seat is vacant — was one of two decisions at the meeting triggered by implementation challenges involved in creating infrastructure that can handle the massive escalation in electricity generated that’s expected as the state’s clean energy policies unfold.
Separate from the OSW decision, the BPU agreed to extend the development deadline of five community solar projects after the developers filed petitions stating the utility to which they would connect their projects, Atlantic City Electricity, would take between 20 and 32 months to connect them to the grid. That delay effectively would prevent them from meeting program-imposed deadlines, the developers said.
BPU Commissioner Zenon Christodoulou acknowledged the OSW decision would not please some stakeholders but was necessary.
“I understand the frustration that this must cause on behalf of some of the developers that solicited [projects] in good faith,” he said. “But we appreciate their partnership and look forward to working with them in the future to provide and promote a better product that will serve them the projects and the ratepayers.
Commissioner Mary-Anna Holden echoed the sentiment but said she was “very comfortable” with the decision.
“It is frustrating, but we’re moving ahead,” she said, adding that she backed the “approach that you’re going to take with the pre-build, and soliciting people that really have an expertise in this transmission building.”
New Solicitation
The state’s third OSW solicitation, which could add capacity of between 1.2 GW and 4 GW and perhaps more, follows a 2019 solicitation in which the BPU backed the state’s first OSW project, Danish developer Ørsted’s 1,100-MW Ocean Wind 1. In the second solicitation, the state backed Ørsted’s 1,148-MW Ocean Wind 2 project and the 1,510-MW Atlantic Shores project.
Gov. Phil Murphy (D) has set a state wind capacity target of 11 GW, of which the BPU so far has awarded 3,758 MW. Four bidders have submitted plans in the third solicitation (See NJ’s 3rd OSW Solicitation Attracts 4 Bidders.)
The BPU on Oct. 27, 2022, approved onshore transmission upgrades totaling $1.07 billion that were submitted under a groundbreaking use of FERC Order 1000’s State Agreement Approach. The approved projects would create a new substation to accept OSW electricity, known as Larrabee Collector Station. (See NJ BPU OKs $1.07B OSW Transmission Expansion.)
The BPU acknowledged at the time that the projects’ selection under the SAA would not prevent future OSW generators from proposing different landing points or different routes to connect their offshore projects with the grid. In response, the board said it would require a successful bidder in its third OSW solicitation to “prebuild” offshore ducts and cabling to connect projects to the grid, known as PBI — creating a single corridor from the shore crossing to the Larrabee collector.
Ferris told board members Wednesday that the BPU planned for the offshore connection to link four OSW projects and land at the New Jersey National Guard Training Center in Sea Girt, from where it would connect to the Larrabee station. That “would minimize environmental and community impacts by resulting in a single short crossing and a single or limited onshore corridor to the point of interconnection,” he said. The BPU planned to recover the cost of the infrastructure through the state’s Offshore Wind Renewable Energy Certificate (OREC) system, which also would fund the OSW projects, he said.
However, Ferris said, the agency now believes the use of the “OREC funding mechanism” and the “requirement that the PBI could only be awarded to a developer who also receives an award as a qualified offshore wind project imposes an unreasonable burden on New Jersey’s ratepayers.”
“Staff has determined that a separate solicitation for the PBI open to transmission developers, transmission owners, offshore wind generation developers and other qualified firms.”
A separate solicitation would “would increase competition and lead to ratepayers’ savings,” he added. He said the BPU staff believed the move would “not affect the generation project component of the third offshore wind solicitation applications.”
Deadline Extension
In a separate case, the board approval of five deadline extensions in the state community solar program highlighted the difficulties faced by solar projects in some parts of the state in connecting projects to the grid.
Solar developers have for a while expressed concern about the challenges, and delays involved in getting projects connected, and cited the area served by Atlantic City Electric (ACE) in South Jersey as the worst. (See Solar Developers: NJ’s Aging Grid Can’t Accept New Projects.)
In outlining the case for an extension, Sawyer Morgan, clean energy representative for the BPU, noted that only 3 MW out of 33 MW of community solar project capacity that was approved by the BPU in the ACE area was expected to open within the program deadline.
The board’s unanimous vote comes as the state prepares to transition to a permanent program — the Community Solar Energy Program (CSEP) — after two heavily oversubscribed community solar pilot programs that resulted in the approval of 150 projects totaling 235 MW. (See NJ Opens Community Solar and Nuclear Support Programs.)
The BPU approved the five projects seeking extensions in the second pilot program. They include two rooftop solar projects developed by Solar Landscape in Millville; two by Trina Solar Development on a Pennsville landfill; and a landfill project created by Greenpower Developers in Stafford Township. The projects had an initial 18-month deadline requiring them to become operational by May 4, 2023, which the BPU subsequently extended to Nov. 4, 2023, Morgan said.
“The petitioners each separately engaged in discussion of alternative interconnection options, but ACE’s construction timelines still extended beyond the deadlines,” the BPU representative said. “All three indicated that they would have been able to fully complete project construction by the deadline were it not for the upgrades required for interconnection.”
The BPU representative said the difficulty of getting community solar projects online in areas served by ACE “may raise equity concerns for potential subscribers, as substantially more projects in other parts of the state have been able to become operational.”
A deadline extension is warranted, he said, because the problems they face “were systemic, unforeseen and unforeseeable by petitioners, and wholly outside of their control.”
Asked about the comments, Francis Tedesco, ACE spokesman, said in an email to RTO Insider that the company is “committed to continuing to work with local and state partners to accelerate the clean energy transition, including community solar, for the communities we serve.”
“We continue engaging with state electric utility companies, solar developers, the NJ Board of Public Utilities and other stakeholders and are actively working toward performing necessary energy grid upgrades to help accommodate community solar projects in our service area,” he said.
