The New Jersey Public Board of Utilities has awarded its first solicitation for offshore wind to Ørsted’s 1.1-GW Ocean Wind proposal
The New Jersey Public Board of Utilities has awarded its first solicitation for offshore wind to Ørsted’s 1.1 GW Ocean Wind proposal.
Three industry teams participated in the auction – Ørsted, Equinor and Atlantic Shores, a Shell/EDF joint venture. The results of the solicitation were announced on 21 June 2019.
Ørsted had two eligible leases in the auction, the first being exclusively in New Jersey, Ocean Wind; and the second in Delaware, Garden State Offshore Wind.
Macquarie Research told OWJ that Equinor was the strongest competitor to Ørsted, given its previous experience in developing offshore wind in Europe.
“Ørsted’s acquisition of Deepwater Wind and the strengthened partnership with Eversource Energy enabled them to leverage the domestic market,” said Macquarie.
The decision set a record for the single largest award for offshore wind in the US to date and is an important step towards meeting the state’s goal of 3.5 GW of offshore wind by 2030, and Governor Phil Murphy’s vision of 100% clean energy for the state by 2050.
“Today’s historic announcement will revolutionise the offshore wind industry here in New Jersey and along the entire east coast,” said Governor Murphy. “Building our offshore wind industry will create thousands of jobs, invite new investments into our state, and put us on a path to reaching our goal of 3.5 GW of offshore wind by 2030. This award is a monumental step in making New Jersey a global leader in offshore wind development and deployment.”
“Thanks to Governor Murphy’s leadership and his trust in the Board of Utilities to deliver upon the important promise of offshore wind, we have taken another important step forward into our 100% clean energy future,” said New Jersey Board of Public Utilities President Joe Fiordaliso. “With today’s award of 1.1 GW of offshore wind, a safer, healthier future for New Jersey is looking brighter and closer than ever.”
Ørsted’s Ocean Wind project, backed by a memorandum of understanding between Ørsted and PSEG Renewable Generation, offered a first year offshore renewable energy credit (OREC) price of US$98.10/MWh. The levelised net OREC cost – which represents the actual OREC costs paid by ratepayers after energy and capacity revenues are refunded to ratepayers – is estimated at US$46.46/MWh, with an estimated ratepayer impact of a monthly bill increase of US$1.46 for residential, US$13.05 for commercial, and US$110.10 for industrial customers.
In selecting Ørsted’s Ocean Wind 1.1 GW project, the board concluded that Ocean Wind’s economic development plans were the most detailed and offered the most benefit to New Jersey. Its project is estimated to result in net economic benefits of US$1.17Bn to the state. The Board said that Ocean Wind also provided the strongest economic guarantees to ensure local content, including manufacturing.
Although all of the proposed projects would help New Jersey reduce greenhouse gas emissions, Ocean Wind’s environmental protection plan, including mitigation of environmental impacts, was judged most complete and most advanced, and the developer’s experience in this area further distinguished its application.
The Board also judged that Ørsted provides the best chance of successful development due to its depth of knowledge, global and regional experience and advanced stage of planning.
Based on the analysis that Ørsted’s project offered the strongest contribution to New Jersey’s economy, combated climate change, provided added reliability to the transmission network, and did so at the lowest reasonable cost and risk, the Board approved Ørsted’s application.