Offshore Wind's New Frontier
A small project moves along in New Jersey
Offshore wind could be coming to New Jersey in a small project. A development company created by fishermen recently filed a petition with state regulators to approve a financing mechanism first made popular in the state for solar power and has since been extended to offshore wind power.
Fishermen’s Energy of New Jersey, LLC filed its petition with the New Jersey Board of Public Utilities. The petition seeks the approval by the NJBPU of offshore renewable energy certificates (ORECs) to support the financing and construction of a proposed wind farm off the coast of Atlantic City. The New Jersey Offshore Wind Economic Development Act was passed last year.
The NJBPU petition would set the electric revenues for this 25 megawatts demonstration-scale project, which would be located about 2.8 miles east of Atlantic City and consist of six turbines.
"We are confident that with our unique on-water experience, along with our offshore wind energy development capabilities, Fishermen's Energy is an ideal partner for making offshore wind energy a reality for the state of New Jersey," says Daniel Cohen, president of Fishermen's Energy.
There’s a race of sorts going on along the East Coast for claim to the first wind project in the Atlantic. Cape Wind in Massachusetts is further along the regulatory path; a demonstration project in Rhode Island has a power purchase agreement as does a larger project in Delaware. Now, this project is moving on its own regulatory path.
“The decision to allow us to receive OREC funding will be up to the NJ BPU. The price for the electricity is within the range we testified to during the legislative process to enact the Offshore Wind Development Act, with about a one tenth of one percent rate increase in the first operating year, which will decrease each year thereafter, as the cost of fossil fired energy increases. This is a bargain for New Jersey and its ratepayers as a societal and energy cost hedge and to start a new industry.”
The credit is similar to the solar RECs (SRECs) carved out for solar energy in New Jersey. An OREC is equal to one megawatt hour of electricity from an offshore wind project, which utilities must purchase in compliance with the state’s renewable portfolio standard.
“This project will be a magnet for industrial development of wind energy manufacturing in New Jersey. The State’s and the NJ BPU’s willingness to support this first offshore wind project for New Jersey and the U.S. will be a key selling point to convince wind turbine manufacturing and related supply chain participants to locate new facilities in New Jersey, bringing their associated jobs and investment.” said Mike Madia, chief operating officer of Fishermen’s.
The Offshore Wind Economic Development Act authorizes 1,100 megawatts in projects, gives the NJBPU the ability to set up to a 20-year OREC price for offshore wind energy projects and provides $100 million in tax credits to attract manufacturers to invest in new facilities and create new offshore wind equipment manufacturing jobs in New Jersey ports.
That’s a prescription many eastern states have written. But who gets to receive all these benefits first?
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