A Primer on New Jersey’s Offshore Wind Industry

By Denise Brush • Issues Coordinator for Offshore Wind

Offshore wind development is a big deal for New Jersey that New Jerseyans are going to be hearing a lot about over the next few years. I hope this overview will provide Sierra Club members with a greater understanding of the situation and what to expect in the future.

How Wind Farms Get Approved

All offshore wind projects currently being developed in the United States are in federal waters (between 3 and 200 miles from shore), so both federal and state authorizations are involved. The first step for wind farm developers is to win a lease area bid from the federal Bureau of Ocean Energy Management (BOEM). Then, developers must submit a site assessment plan (SAP) to BOEM, including an environmental impact statement, which requires public hearings. After that, developers need approval from the NJ Board of Public Utilities (BPU) to sell wind energy to state utility customers, and then they must go back to BOEM for approval of their construction and operation plan.

Only after all these hurdles are overcome can offshore wind projects be built and begin operating. This is good because it helps ensure that any negative environmental impacts are mitigated.

Offshore wind projects require huge capital investment, so developers are typically partnerships between large multinational companies. The winners of the first BOEM lease auction for New Jersey were Ocean Wind, a partnership between the Danish company Ørsted and NJ utility PSE&G; and Atlantic Shores, a partnership between EDF Renewables and Shell.

Offshore wind projects also need strong support from state government. Since taking office in January 2018, Gov. Phil Murphy has been an enthusiastic supporter of renewable energy and particularly offshore wind power. His Executive Order No. 8 (January 2018) set an initial state goal of obtaining 3,500 megawatts (MW) of electricity from offshore wind power by 2030. This set in motion a process that included developing an offshore wind strategic plan, developing an offshore wind renewable energy credit (OREC) program and funding mechanism, and issuing a solicitation for offshore wind projects generating 1,100 MW.

Wind Projects Timeline

The first three offshore wind projects planned for the Atlantic City coast, called Ocean Wind 1 and 2 and Atlantic Shores, won their leases in a BOEM auction in early 2016. The first to be built will be Ocean Wind 1, whose SAP was approved by BOEM in May 2018 and may start commercial operations as soon as the end of 2024.

At the time of its SAP and state approvals, Ørsted’s 1,100 MW Ocean Wind 1 project was the largest proposed offshore wind farm in the country. It will have 98 turbines, each over 800 feet high, spaced 1 mile apart, and located 15 miles offshore. The other two NJ projects are similar in size and will likely be operational between 2027 and 2029.

In November 2019, following the release of the state Energy Master Plan, which included a goal of 50% renewable energy by 2030, Murphy increased the state’s offshore wind goal from 3,500 MW to 7,000 MW. Another goal increase came later.

In March 2021, President Biden announced a nationwide target of deploying 30 gigawatts of offshore wind projects. Along with this announcement came the designation of the New York Bight (an area of shallow waters from Long Island to the NJ coast) as a new priority Wind Energy Area.

BOEM began making plans immediately for a lease sale to offshore wind developers in the New York Bight, which was held in February 2022. The companies who won those lease areas are now beginning the federally supervised process of environmental assessment and construction planning.

While few specifics are available yet, it appears that these new wind farms will be significantly farther offshore (perhaps 50 miles), taller, and more numerous. They will not be as far offshore as the proposed Hudson Marine Sanctuary (100 miles), but they may affect this area.

In New Jersey, the pace of offshore wind development kept increasing. On June 30, 2021, the BPU awarded a combined 2,658 MW of offshore wind capacity for the Atlantic Shores project and Ørsted’s Ocean Wind II, raising the state’s total planned capacity to over 3,700 MW.

Recent Events

This fall has seen two important events regarding offshore wind development in New Jersey. On September 21, 2022, Gov. Murphy increased New Jersey’s offshore wind goal by nearly 50% to 11,000 MW by 2040, from 7,500 MW previously. He also directed the BPU to study the feasibility of increasing the target further.

On October 26, 2022, the BPU announced a transmission agreement with regional power grid operator PJM to support the lease areas for the New York Bight. The project will involve a grid upgrade and expansion of the Larrabee Substation in Monmouth County into an interconnection facility.

NJ regulators got dozens of proposals. They could have let the developer of each project choose their own transmission strategy and negotiate it separately with PJM, but instead of a market-based solution they chose a “state agreement approach.” This minimizes the number of onshore connection points and the cost to NJ ratepayers. It also allows for economies of scale.

With many other northeastern states also targeting renewable energy goals, the PJM interconnection queue is backlogged. An interconnection process reform package is awaiting Federal Energy Regulatory Commission approval.

Power Cables and Worker Training

New Jersey has big plans to provide the necessary infrastructure to support the offshore wind industry. A “state of the art” manufacturing facility is planned for the Port of Paulsboro (Gloucester County) on the Delaware River.

Workers at this facility will build the giant towers (monopiles) that support the wind turbines Ørsted will purchase from General Electric. The turbine components will be shipped downriver to the yet-unbuilt New Jersey Wind Port at Lower Alloways Creek in Salem County for final assembly and transport to wind farms off the Atlantic coast.

Power cables for the Ocean Wind projects are planned to come onshore at two points on the Jersey Shore: at Ocean City (through a state-owned Green Acres site), to the decommissioned B.L. England coal plant; and at Island Beach State Park, to the decommissioned Oyster Creek nuclear plant. The public hearing on the Green Acres proposal was scheduled for November 14, 2022.

Because the offshore wind industry will require so many workers, and our state wants those jobs, workforce training is an important part of the development of infrastructure to support offshore wind. The state has created the Wind Institute for Innovation and Training to ensure NJ residents have a chance at those jobs.

The Wind Institute is partnering with community colleges such as Rowan College of South Jersey to develop career and technical education programs that will be needed soon. There are also many conversations going on with the leadership of various trade unions.

Currently, New Jersey is a national leader in the development of offshore wind power. This is largely due to our governor’s leadership. At this point there is so much investment and momentum that progress is unlikely to halt even with new state leadership. Offshore wind power will be an important component of the transition to renewable energy in New Jersey and throughout the East Coast over the next several decades.