Looking to fill the gap in its offshore wind energy portfolio with the sudden cancellation last year of two projects totaling 2.25 GW, New Jersey has moved to replace the capacity with two new utility-scale awards.
Selected on Jan. 24 to keep the state’s clean energy program on track is a U.S. based partnership between developers Invenergy and energyRe, with a second award to a joint venture of French utility TotalEnergies, London-based Corio Generation and U.S.-based Rise Power and Light. The two projects total 3.7 GW.
The state’s third offshore wind solicitation and largest offshore wind award comes just three months after Danish firm Orsted backed out of two contracts to supply the state with clean energy, citing supply chain obstacles and fast rising costs that caused corporate losses.
The developer also announced on Jan. 25 that it has withdrawn from offtake contracts with Maryland for its two approved Skipjack projects, set to generate 966 MW off the Delmarva peninsula, stating that the financial terms "are no longer commercially viable because of today's market conditions." The firm said it would still advance the projects' permitting and development, including seeking federal approval.
Related to the New Jersey projects, Gov. Phil Murphy said in a statement that the new awards are “undeniable proof that the future of offshore wind in New Jersey is as strong as ever.” The state Board of Public Utilities approved the two contracts unanimously. They are the state’s largest-yet offshore wind projects and move it closer to achieving Murphy’s goal of reaching 100% clean energy by 2035 and 11 GW of installed offshore wind by 2040, the board said in its order.
Invenergy-energyRe’s 2.4-GW Leading Light project won an offtake contract priced at $112 per MWh, while Total-Corio’s 1.34-GW Attentive Energy project is set for an offtake contract priced at $131/MWh.
The projects will be located more than 40 miles from the New Jersey coast.
They would join the 1.5-GW Shell-EDF Atlantic Shores project, under development nine miles offshore, which was awarded in a previous procurement.
Local Supply Chain
The two projects are large enough to establish a wind turbine generator tower manufacturing plant at the New Jersey Wind Port, a $685-million state-funded facility, and will contribute to increased production at its monopile production center in Paulsboro, the board said.
Invenergy has committed to 3,928 full-time jobs and $1.7 billion of direct expenditures through the first 10 years of its project's operation and 11,329 jobs and an estimated $3.7 billion total expenditures over the project life. It is set to come online in 2031.
The state also has ewquired the Total-led Attentive team to post a $67-million performance security, with Invenergy's Leading Light required to post a $120-million security.
Its preferred location for an operations and maintenance port is the Buckeye Port Reading Facility in Port Reading, N.J., to be built with union labor and costing about $78.6 million.
Offshore wind in the U.S. was off to a good start in 2016, but faced major setbacks more recently when inflation and supply chain problems delayed projects or caused power contract—or whole project—cancellation by developers or state officials in Massachusetts, Connecticut, New York, Rhode Island and Maryland.
“The Board acknowledges the challenges faced by offshore wind projects awarded prior to 2023 but remains undeterred in its pursuit of offshore wind as a component of the state’s clean energy goals,” it said, but added, “this is not the time for inaction,” with impacts of climate change increasing.
Pricing for the projects will be adjusted for inflation based on the change in certain labor and commodity indices, but adjustments are limited to 15% increase or decrease.
Commitments
The two projects together committed to provide $164 million, the full amount of funding necessary for German steel fabricator EEW to expand its turbine foundation production capacity, the board said. Both also committed to marshalling at the wind port and to purchase turbine towers from a manufacturing plant to be developed there.
Invenergy has been encouraging supply chain partners to localize manufacturing facilities at the wind port because it is one of the few on the East Coast with capacity to co-locate both marshaling activities and Tier 1 manufacturing, the board said.
“Meeting these commitments will provide significant economic benefits in manufacturing and related supply chain developments through use of New Jersey ports and infrastructure,” the board said.
Both projects are located in the New York Bight wind energy leasing area between the state and New Jersey that was auctioned in 2022.
“New Jersey reasserts its leadership in the U.S. offshore wind sector with today's 3.7 GW commitment and securing new supply chain investments,” said Liz Burdock, CEO of sector advocacy group Oceantic.
But one local group aired a different view. "Amid the increasing ... uncertainties with the offshore wind industry, as well as increasing threat to the marine ecosystem, the awarded contracts fail the test of good governance, fiscal responsibility and due diligence,’’ Clean Ocean Action claimed in a statement.
