The New Jersey Board of Public Utilities (NJBPU) has selected the Ocean Wind project proposed by Ørsted with support from Public Service Enterprise Group (PSEG) to negotiate a 20-year offshore wind renewable energy credit (OREC) for an offshore wind farm with a capacity of 1,100MW.
Located off the coast of Atlantic City, Ocean Wind will be New Jersey’s first large-scale offshore wind farm. Subject to Ørsted’s final investment decision, the wind farm is expected to be completed by 2024.
“Today’s historic announcement will revolutionize the offshore wind industry here in New Jersey and along the entire East Coast,” said New Jersey Governor Phil 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 3,500 MW of offshore wind by 2030. This award is a monumental step in making New Jersey a global leader in offshore wind development and deployment.”
Ørsted will work with PSEG’s non-utility affiliates, which will provide energy management services and potential lease of land for use in the project development and execution phase. PSEG has an option to become an equity investor in the Ocean Wind project.
The project is expected to create over 3,000 direct jobs annually through development and the three-year construction cycle. Ørsted is also proceeding with plans to establish an operations and maintenance (O&M) base in Atlantic City.
“We’re delighted that New Jersey has chosen Ørsted to build the State’s first large-scale offshore wind farm,” Martin Neubert , Executive Vice President and CEO of Ørsted Offshore, said.
”Since Ørsted developed the world’s first offshore wind farm in 1991, we have pushed the industry forward to help turn offshore wind into a large-scale and cost-competitive source of clean energy. We look forward to delivering Ocean Wind which will be the first offshore wind farm in the US to cross the 1GW mark and will contribute significantly to meeting Governor Murphy’s ambitious renewable energy goals.”
NJBPU received applications from three offshore wind developers: Atlantic Shores Offshore Wind, a partnership between EDF Renewables and Shell New Energies; Boardwalk Wind, sponsored by Equinor; and Ocean Wind, which is backed by a memorandum of understanding between Ørsted and PSEG Renewable Generation.
Evaluation criteria included OREC purchase price, economic impact, ratepayer impact, environmental impact, the strength of guarantees for economic impact, and the likelihood of successful commercial operation.
According to NJBPU, Ørsted’s Ocean Wind project offered a first year OREC price of USD 98.10 per MWh. The levelized net OREC Cost– which represents the actual OREC costs paid by ratepayers after energy and capacity revenues are refunded to ratepayers – is estimated at USD 46.46/MWh, with an estimated ratepayer impact of a monthly bill increase of USD 1.46 for residential, USD 13.05 for commercial, and USD 110.10 for industrial customers.
Thomas Brostrøm , CEO of Ørsted US Offshore Wind and President of Ørsted North America, said: “Today’s announcement firmly establishes a fast-growing global industry in New Jersey, which will create jobs and supply chain in the state. Ocean Wind will ensure that the state and its residents not only benefit from clean, renewable power, but that they reap the rewards of being an early mover at scale in the offshore wind industry as it grows in the US.”
Ørsted has so far secured a US offshore wind build-out portfolio with a total capacity of approximately 2GW to be completed between 2022 to 2024.