After the major setback, New Jersey awards two offshore wind contracts
Why it matters
The awards, by the state's Board of Public Utilities, came just three months after Orsted, one of the world's largest developers of offshore wind farms, pulled out of two contracts to supply power to New Jersey.
That abrupt withdrawal was a significant setback to the state's goal of phasing out fossil fuels over the next three decades. Gov. Philip D. Murphy, a Democrat, has set a goal of generating 11,000 megawatts of power — enough to power more than 5 million homes — from offshore wind by 2040.
“This investment in clean energy is really about the future of New Jersey and our fight against climate change,” said Christine Guhl-Sadovy, a former Murphy aide whom he named chair of the utility board last year.
What it will cost
The cost of obtaining offshore wind energy has risen sharply due to global inflation, higher interest rates and disruptions to supply chains. Orsted and other wind farm developers have cited these factors as reasons for canceling contracts.
Under the contracts New Jersey awarded Wednesday, the typical New Jersey residential customer's monthly bill would increase by nearly $7, the utility estimates. One of the canceled Orsted contracts was estimated to have cost the consumer about half as much.
The details
The state chose two of the three remaining bidders in its latest request for electricity from offshore wind energy.
A, Guiding light windwould be the first US-led operation to build a wind farm in the ocean and supply energy from it. Leading Light is a partnership between Invenergy and energyRe, a New York-based company chaired by Jeff Blau, the CEO of Related Companies, one of the largest developers in New York City.
The other winning bidder, Attentive Energy Twois a partnership between TotalEnergies, a French utility company, and London-based Corio Generation.
The two projects together could produce approximately 3,470 megawatts of electricity.
In addition, New Jersey has a contract with another offshore project, Atlantic Shores, for 1,510 megawatts. Combined, the three projects could deliver more than a third of the state's 2040 goal.
What the critics say
Elected officials representing parts of the Jersey Shore, including Rep. Jeff Van Drew, a Republican, have fervently opposed Mr. Murphy's offshore wind plans.
On Tuesday, Mr. Van Drew wrote to the governor calling on him to “drop your unrealistic Green New Deal agenda before you cause irreparable harm to our state's economy, thriving ocean industries, and fragile marine ecosystems.”
What's next?
Kris Ohleth, director of the Special Initiative on Offshore Wind, a supporter of the state's plan, said New Jersey still has work to do to get back on track toward its offshore wind goals. “They have to make up some lost ground,” she said.
But she said she expected the state to respond by accelerating the awarding of more contracts, rather than scaling back its ambitions.
The state's goals “are not out of reach,” Ms. Ohleth said, adding: “They are far away, so it's kind of hard to say.”