New Jersey seen as future in wind projects
Delaware’s flagship offshore wind project may be going dormant, but observers say offshore wind is off to a promising start in New Jersey.
Legislation passed last year could make the Garden State the new leader in building the first generation of offshore wind turbines off the U.S. coast, said Matt DaPrato, an analyst at IHS Global Insight.
“Given the way New Jersey structured its market, the commitment it’s made, that’s probably the brightest spot of the industry,” DaPrato said.
He notes that New Jersey’s governor, Republican Chris Christie, is a surprising champion for subsidies for renewable energy, which have taken criticism from the political right.
In Delaware, NRG Energy said two weeks ago it will terminate its offshore wind power purchase agreement with Delmarva Power on Dec. 27, if a buyer for its Bluewater Wind division does not step forward. That would kill its plan for a wind farm off the coast of Rehoboth Beach.
Economic conditions, as well as uncertain federal subsidies, were NRG’s reasons for ending its commitment to the project, which would be 13 miles off the Delaware coast.
Power from offshore wind turbines typically costs more than most other forms of energy, renewable or otherwise. With the price of natural gas — a major fuel for old-school electricity — having fallen unexpectedly in recent years, it’s enlarged the premium between traditional and renewable power.
That made it harder for Bluewater to find a buyer for more of its power, which would have allowed it to build more turbines, and make more money.
But in New Jersey, Christie signed into law the Offshore Wind Economic Development Act in August 2010, which is intended to circumvent this problem.
The law directs the Board of Public Utilities to require power sold in the state to include 1,100 megawatts of offshore wind generation — five times more than than the Delaware Bluewater project.
It will cover the power purchased by PSEG, Atlantic City Electric, Orange & Rockland, and Jersey Central Power & Light.