Interior to lease 344K acres off N.J.

Source: Phil Taylor, E&E reporter • Posted: Thursday, September 24, 2015

The Interior Department today announced it will hold a Nov. 9 auction for the rights to build wind farms in 344,000 acres of federal waters off New Jersey.

If fully developed, the wind area that has been divided into two leasing areas could generate more than 3,400 megawatts of carbon-emission-free energy, according to the National Renewable Energy Laboratory.

The announcement comes months after Deepwater Wind began construction on the nation’s first offshore wind project in Rhode Island state waters (Greenwire, July 28). The $225 million, 30 MW Block Island Wind Farm will have five turbines and is scheduled to begin producing energy next year.

“On the heels of this summer’s historic ‘steel-in-the-water’ milestone for the nation’s first commercial offshore wind farm, today’s announcement marks another major step in standing up a sustainable offshore wind program for Atlantic coast communities,” Interior Secretary Sally Jewell said in a statement.

While Interior’s Bureau of Ocean Energy Management has awarded nine commercial offshore wind leases and generated $14.5 million in winning bids at competitive auctions, the industry has experienced a slow start in U.S. waters compared with Europe.

Challenges include a lack of a supply chain, high installation costs, lawsuits and the expiration of key tax incentives. New Jersey waters are no exception.

Last year, the state’s Board of Public Utilities rejected a 25 MW pilot offshore wind farm off Atlantic City by Fishermen’s Energy, arguing that power from the project would be too expensive. The Cape May, N.J.-based company in June filed legal briefs challenging the board’s decision before New Jersey’s highest court (EnergyWire, June 24).

BOEM Director Abigail Hopper today said her agency sees “sustained commercial interest in offshore wind development.”

The agency said there are 13 companies legally, technically and financially qualified to participate in the November auction, which will consist of two leasing areas beginning about 8 miles offshore.

As with earlier auctions, BOEM will give extra credit to bidders that can show they’ve made progress toward building a wind farm, such as through obtaining a power purchase agreement or New Jersey Offshore Wind Renewable Energy Certificate award.

Fishermen’s Chief Operating Officer Paul Gallagher told the Press of Atlantic Citytoday that his firm plans to secure a spot in the auction.

“This is the sweet spot in Atlantic offshore wind,” he said, according to the paper. “There’s a nice gentle continental shelf with a great bottom to do construction in.”