New Jersey took a big step toward meeting the state goal of developing 7,500 MW of offshore wind capacity by 2035 on June 30 by selecting two developers to build 2,568 MW—the largest single award in the U.S. to date, said Gov. Phil Murphy.

Atlantic Shores, a consortium of EDF and Shell New Energies US, won the larger piece at 1,500 MW with 110 turbines offshore of Atlantic City. It would be the state's largest offshore wind project and third largest in the U.S., the firms said.

Developer Orsted was named to build Ocean Wind 2, a 1,148-MW project off the Cape May coast with 82 turbines, which is a follow on to the 1,100-MW, 92-turbine Ocean Wind 1 awarded in 2019.

Both projects are to be sited at least 10 miles offshore and will use turbines of 13 to 14 MW.

Building a Supply Hub

The combined award “further solidifies New Jersey as an offshore wind supply chain hub,” said Murphy, who has set a goal for the state to secure 100% clean energy by 2050. The largest previous procurement was by New York state, with 2,490 MW in January. 

"We can’t build our way out of the climate crisis." said Doug O'Malley, director of advocacy group Environment New Jersey.  "We need renewable energy, which is why offshore wind is critical for NJ."

The NJ Board of Public Utilities expects to issue an additional 1,200 MW solicitation in 2022.

Ocean Wind 1, in which state power provider PSEG is a 25% stakeholder, is now under federal environmental review, with construction set to start next year and energy generation in 2024. Its output is predicted to power about 500,000 homes.

Both developers committed to building new manufacturing plants at a marine terminal in Paulsboro and at a new Wind Port in Lower Alloways Township, both on the Delaware River.

Orsted is set to locate a nacelle assembly plant there in partnership with General Electric. The developer is making an estimated $250 million manufacturing investment to support the projects and others in the U.S., and said Ocean Wind 2 will generate more than $4.8 billion in net economic benefit for the state.

EDF/Shell also will build a nacelle plant with MHI Vestas, and is committed to construction of a 10-MW greeh hydrogen pilot plant powered by offshore wind to be used in gas blending.

David Hardy, CEO of Ørsted Offshore North America, said the awards indicate “New Jersey is now firmly at the heart of the American offshore wind industry.”

Joris Veldhoven, commercial and finance director at Atlantic Shores, added that “as offshore wind prepares to take off in the U.S. this is a critical moment to lay the groundwork for workforce training and supply chain development.”

The developers also will fund new workforce training programs and research efforts to protect wildlife and commercial fishing in the area, with the state operating engineers' union terming the efforts "a win for workers across New Jersey."

Opponents have been vocal.

In an early June letter to Interior Secretary Debra Haaland, the Long Beach Island Coalition for Wind Without Impact asked the agency to move the Atlantic Shores project to an area from 30 to 57 miles offshore, claiming it "poses an imminent threat of serious or irreparable harm or damage" to resources; wildlife; property; marine, coastal and human environments; and sites, structures or objects "of historical or archaeological significance.”

"The NJ Audubon Society has endorsed any project more than 8 miles off shore," says Kris Ohleth, director of the University of Delaware's Special Initiative on Offshore Wind, a new policy research clearinghouse, and a former Orsted senior manager. "They understand the biggest threat is climate change."

She adds that larger turbine size and other technology advances will limit construction volume and bring down costs, noting that they have dropped 60% in Europe with many offshore wind projects operating without government subsidy.

But one Orsted executive said federal review must ramp up for US projects to meet the Biden Administration's target.  “To have 30 GW installed by 2030 will mean that permitting processes need to be expedited,” Orsted chief commercial officer and deputy CEO Martin Neubert told Reuters.

Ohleth emphasizes that more solicitations in New Jersey, as well as in other states, will encourage potential offshore wind sector suppliers "to feel comfortable moving their operations."

Links to Land Power Systems Still Challenge

Meanwhile, regulators in April issued a solicitation for transmission options that can deliver power to the existing grid, and late last month the state legislature passed a bill to give state-approved wind energy projects, not local officials, the authority to locate, build, use and maintain wires and associated land-based underground infrastructure.

The bill, with a last minute add now requiring a public hearing on a proposed project, awaits Gov. Murphy's signature.

But offshore wind transmission policy will need better coordination of states, grid operators and the federal government to accommodate the numerous offshore wind projects lining up, Brandon Burke, vice president of policy and regulatory engagement for the Business Network for Offshore Wind, which advocates a more linked transmission strategy, told Platts S&P Global. "This is a challenge with transmission planning in the U.S. generally" that does not tend to "holistically account for the benefits that may occur, so the projects are siloed ... and may not reflect their physical reality to enhancements to the system." he said.

More than 52 GW of proposed offshore wind interconnections were in the queues for grid operators PJM Interconnection, New York ISO and ISO New England as of October 2020, Burke added, which is set to increase with results of the competitive lease sale announced last month in the New York Bight south of New York City, which could add more than 7 GW of capacity when completed likely next year.

The limited shore space for cable connections and push by developers to handle their own grid links may spur more U.S. interest in developing ocean-based "energy island" hubs to handle power transimission from wind turbines to receiving power systems, similar to one now being developed in Europe's North Sea.

In proposed development in other states, the federal Bureau of Ocean Energy Management said July 2 that it is conducting an environmental review for up to 3,000 MW of offshore wind capacity off the coast of Virginia. The project calls for  construction of 205 turbines and three offshore substations with one cable landfall in Virginia Beach.

Meanwhile, Maine lawmakers on June 30 approved a compromise that would ban offshore wind construction in state waters for 10 years but allow it in federal waters in an effort to address fishing industry concerns.

The pact includes new research of offshore wind impacts and a strategic plan to be developed before award of onshore transmission cable permits.