Seeking to fill the gap in its offshore wind portfolio with the sudden cancellation last year of two projects totaling 2.25 GW, New Jersey has moved to replace capacity with two new awards to scale of public services.
Selected on January 24 to keep the state’s clean energy program on track is a US-based partnership between developers Invenergy and energyRe, with a second prize going to a joint venture of French company TotalEnergies and Corio Generation, based in London.
The two projects add up to 3.7 GW.
The state’s third offshore wind application and largest offshore wind award comes just three months after Danish company Orsted pulled out of two contracts to supply clean energy to the state, citing the supply chain hurdles and rapidly rising costs that caused corporate losses.
The awards are “undeniable proof that the future of offshore wind in New Jersey is as strong as ever,” said Gov. Phil Murphy. he said in a statement. The State Public Services Board approved the two contracts unanimously. They are the state’s largest offshore wind projects and bring it closer to Murphy’s goal of 100 percent clean energy by 2035 and 11 GW of installed offshore wind by 2040, said the together in their order.
Invenergy-energyRe’s 2.4GW Leading Light project won a procurement contract at $112 per MWh, while Total-Corio’s 1.34GW Attentive Energy project is set for a purchase contract with a price of $131 per MWh. Residential ratepayers will see an additional charge estimated at $6.84 per month and commercial customers $58 when the projects come online over the next decade.
The projects will be located more than 40 miles off the New Jersey coast.
Local supply chain
“New Jersey makes a strong case that key parts of the offshore wind supply chain will continue to be located here [the state] both for current and future projects developed” within and outside its borders, the board said. The two projects are large enough to establish a wind generator tower manufacturing plant at the Windport of New Jersey, a $685 million state-funded facility, and will help increase production at its facility monopile production facility in Paulsboro, he added.
The projects “achieve economies of scale,” regulators said.
Invenergy has committed to 3,928 full-time jobs and $1.7 billion in direct spending over the first 10 years of its project’s operation, and 11,329 jobs and an estimated total spending of $3.7 billion over the life of the project. project It is scheduled to come online in 2031.
Its preferred location for an operations and maintenance port is the Buckeye Port Reading Facility in Port Reading, NJ, which will be built with union labor and cost about $78.6 million.
Offshore wind in the U.S. got off to a good start in 2016, but faced major setbacks last year when inflation and supply chain issues caused developers or state officials to cancel projects as well in Massachusetts, Connecticut, New York and Rhode Island.
“The Council recognizes the challenges facing offshore wind projects awarded before 2023, but is not relenting in its pursuit of offshore wind as a component of the state’s clean energy goals,” he said the council, and noted that “this is not the time for inaction”. with the increasing impacts of climate change.
Project prices will be adjusted for inflation based on changes in certain labor and commodity indices, but adjustments will be limited to a 15% increase or decrease.
commitments
The two projects together committed to provide $164 million, the total amount of funding needed for German steelmaker EEW to expand its turbine foundation production capacity, the board said. Both have also committed to cluster in the wind port and buy turbine towers from a manufacturing plant to be developed there.
Invenergy has been encouraging supply chain partners to locate manufacturing facilities at the windport because it is one of the few on the East Coast with the capacity to locate both sorting activities and Tier 1 manufacturing, said the board
“Meeting these commitments will provide significant economic benefits to manufacturing and related supply chain developments through the use of New Jersey’s ports and infrastructure,” the board said.
Both projects are located in the New York Bight Wind Energy Lease area up for auction in 2022.
The Invenergy project is backed by financial investors, FirstLight PSP, Ullico Infrastructure Fund and Atlas Renewables Holdings, which is indirectly controlled by Blackstone Inc. The Canadian investment firm Caisse de dépôt et placement du Québec is also supporting the project.
The new projects would join the 1.5GW Shell-EDF Atlantic Shores project that was awarded in a previous procurement.
“New Jersey reaffirms its leadership in the offshore wind sector in the United States with the current commitment of 3.7 GW and securing new investments in the supply chain,” said Liz Burdock, CEO of industry advocacy group Oceantic.
But a local advocacy group was unhappy with the awards.
“Amid growing financial, technical, economic and scientific uncertainties with the offshore wind industry, as well as the growing threat to the marine ecosystem, the awarded contracts fail the test of good governance, fiscal responsibility and due diligence,” said Clean Ocean Action. in a statement.
