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 award going to a joint venture of French company TotalEnergies, Corio London-based Generation and US-based Rise Power and Light. 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 developer also announced Jan. 25 that it has pulled out of procurement contracts with Maryland for its two approved Skipjack projects, which will generate 966 MW on the Delmarva Peninsula, saying the financial terms are “no longer commercially viable due to current market conditions.” .” The company said it would still move forward with permitting and development of the projects, including seeking federal approval.
Related to New Jersey projects, Governor Phil Murphy He 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 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.
The projects will be located more than 40 miles off the New Jersey coast.
They would join the 1.5GW Shell-EDF Atlantic Shores project, under development nine miles offshore, which was awarded in an earlier tender.
Local supply chain
The two projects are large enough to establish a wind turbine generator tower manufacturing plant at Windport New Jersey, a $685 million facility, and will help increase production at its monopile production center in Paulsboro, the board 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.
The state has also asked the Total-led Attentive team to post a $67 million performance bond, with Invenergy’s Leading Light required to post a $120 million bond.
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 more recently faced major setbacks as inflation and supply chain issues delayed projects or led to contract cancellations. ‘energy (or the entire project) by developers or state officials in Massachusetts, Connecticut, New York. , Rhode Island and Maryland.
“The Board recognizes the challenges facing offshore wind projects awarded prior to 2023, but is unfazed in its pursuit of offshore wind as a component of the state’s clean energy goals,” he said , but added, “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 in the New York Bight wind energy lease area between the state and New Jersey that is up for auction in 2022.
“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 group issued a different view. “Amid growing…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,” stated Clean Ocean Action in a statement.
