The New Jersey Board of Public Utilities on Wednesday voted unanimously to approve the state’s second offshore wind project by naming two developers to produce 2,658 megawatts of energy off the coast — enough to power 1.15 million homes.
The project will be split between two companies: Atlantic Shores Offshore Wind LLC, a partnership of Shell New Energies US and EDF Renewables North America; and, Ocean Wind 2 LLC, an Ørsted subsidiary.
Officials said it amounts to the “nation’s largest combined offshore wind” award announced so far in the U.S.
The state’s first project was awarded in June 2019 and is currently under federal environmental review. It is set for construction next year by the Danish multinational Ørsted and PSEG, and is expected to start making power in 2024. It will be 1,100 megawatts in size, enough to power about 500,000 homes.
BPU president Joseph Fiordaliso called the awarding of the second project, known as a solicitation, “an exciting day for New Jersey.” He cited the current extreme weather in the West, as well as sweltering temperatures on the East Coast, as examples of climate change and the need to act quickly on renewable energy.
“When it comes to addressing climate change,” Fiordaliso said, “doing nothing is not an option.”
Officials say offshore wind will also generate billions for the state economy.
Both companies have pledged to use two facilities currently being built: a wind-specific area at the Paulsboro Marine Terminal in Gloucester County; and the New Jersey Wind Port, in Lower Alloways Creek, Salem County.
They have also agreed to fund $26 million in wildlife research and fish monitoring in the region, and committed to building a nacelle assembly facility at the Wind Port. The nacelle houses the high-value components that convert the energy of rotating blades into electrical energy.
Here’s how the project breaks down:
Atlantic Shores will install an array of turbines capable of producing 1,510 megawatts and will be located about 10.5 miles off the coast between Atlantic City and Barnegat Light. It is expected to be launched in two phases over 2027 and 2028. The company has not locked in a formal agreement with another company to build its share of a nacelle facility, but says Vestas is a top possibility.
It will also include a “green hydrogen” pilot facility. Direct and indirect economic benefits to New Jersey are expected to total $1.69 billion.
Ocean Wind 2, at 1,148 megawatts, will be erected adjacent to Ørsted’s Ocean Wind 1 project about 13.8 miles off the coast of Atlantic City. It is expected to be operational in three phases from 2028 through 2029. The company has also committed to providing money to complete development of the Paulsboro terminal, and will collaborate with GE on a nacelle facility.
It will also build an assembly facility with General Electric at the Wind Port as well as a truck electrification pilot project at Port Newark. Officials expect it will have direct and indirect economic benefits of $1.66 billion.
The two new projects will create roughly 7,000 “high-quality jobs” across the state, officials said.
In all, the state’s ambitious offshore wind plan under Gov. Phil Murphy calls for more solicitations to reach its goal of 7,500 megawatts of energy through 2035, enough to power 3.2 million homes. Murphy has set a target of powering the state with 100% clean energy by 2050.
“Today’s award, which is the nation’s largest combined award to date,” Murphy said, “further solidifies New Jersey as an offshore wind supply chain hub and leader in the offshore wind industry in the United States.”
Indeed, officials are optimistic that the Paulsboro and Salem facilities will become not only fully realized wind turbine manufacturing facilities, but also key to the offshore wind supply chain for the East Coast.
“We are thrilled to be moving forward with our project and cementing our commitment to deliver clean, renewable power and well-paid jobs to the Garden State for years to come,” said Joris Veldhoven, commercial and finance director at Atlantic Shores. “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.”
Veldhoven said the Atlantic Shores project includes initiatives to train local workers and bring in manufacturing jobs.
David Hardy, CEO of Ørsted Offshore North America, said that with the BPU’s vote, “... New Jersey is now firmly at the heart of the American offshore wind industry.”
Hardy said Ørsted had already set up a $15 million trust to ensure that female- and minority-owned businesses were represented in Ocean Wind 1. The company will now allocate $8 million more, and include veteran-owned businesses seeking to enter the offshore wind industry.
Doug O’Malley, director of Environment New Jersey and an offshore wind advocate, said he was pleasantly surprised by the size of the solicitation, which was bigger than observers expected.
“In the middle of a heat wave, the timing is perfect for the NJBPU to double down on offshore wind and expand New Jersey’s commitment to a clean, renewable energy future,” O’Malley said.
Ed Potosnak, executive director of the New Jersey League of Conservation Voters, said the BPU’s vote, “will help address the climate crisis” and “create thousands of good-middle class jobs that can’t be outsourced.”
Though BPU Commissioner Dianne Solomon voted in favor of the project, she did urge some caution, saying it’s too early to estimate the rates residents or businesses will pay for the power generated by offshore wind, especially when the cost of transmission and other needed upgrades have to be factored in.
“I caution that we should be mindful of the ever-increasing costs of energy in New Jersey,” Solomon said.