NJ pitches faster, cheaper way to bring power from offshore wind farms

Source: By TOM JOHNSON, NJ Spotlight • Posted: Thursday, April 27, 2023

State tries a second time for a regional approach to building — and paying for — transmission lines

New Jersey is taking another look at how to bring power ashore from the offshore wind farms it plans to build, once again adopting an approach it says is the most cost-effective way to deliver that electricity to customers. 

For the second time, the state aims to join the nation’s largest grid operator in soliciting bids to build transmission lines to accommodate an emerging offshore wind industry. The goal is to minimize environmental harm and costs to consumers. 

As part of that process, the New Jersey Board of Public Utilities staff has been directed to accelerate discussions with other states also developing offshore wind capacity to jointly look at regional transmission solutions. Such a move would divvy up the cost of bringing power ashore among several states, instead of falling only on New Jersey ratepayers. 

It is a significant issue since the cost of building underwater power lines and offshore wind substations to bring power from more than 20 miles out in the ocean is expected to cost tens of billions of dollars. 

No offshore wind farms are operating in New Jersey, but it and several neighboring states are counting on the technology to replace fossil fuel power plants, a major source of emissions contributing to climate change. 

Credit: NJBPU
Windpower transmission options

In a formal request Wednesday to PJM Interconnection, the BPU asked the grid operator to formally solicit transmission solutions to serve an additional 3,500 megawatts of wind energy to achieve the Murphy administration’s goal of 11,000 MW by 2040. 

The bids will be solicited in a competitive process overseen by BPU in conjunction with PJM. This would be the second time the so-called State Agreement Approach has been used by New Jersey. In October, the agency awarded $1 billion to Jersey Central Power & Light and a pair of clean-energy companies to build a new substation in central Jersey to serve as a single connection point on land for offshore wind farms. 

In doing so, the state rejected more expensive and ambitious projects that involved more extensive interconnections out in the ocean and the development of offshore wind substations. Those plans likely will be revived by the 13 developers who participated in the first solicitation last October. 

Anbaric Development Partners, a bidder in the previous solicitation, said it looks forward to participating in the latest process. 

“Today’s board action sets the state on a course to reach its aggressive clean energy goals while also providing for significant ratepayer savings and reduced environmental impacts, all while creating a robust, resilient, and future-focused transmission system,’’ said Janice Fuller, president of Mid-Atlantic, a division of Anbaric. 

Nothing set in stone 

Clean-energy advocates, who generally support a regional transmission approach, also praised the move. 

“This is big news for New Jersey’s electric grid and the rest of the region,’’ said Doug O’Malley, director of Environment New Jersey. “Offshore wind is going to generate the most clean energy in the history of PJM. They need to get going.’’ 

In the latest solicitation, transmission developers can submit proposals to upgrade onshore transmission facilities to accommodate the increased electricity the existing grid will have to handle from the offshore wind farms, onshore substations to offshore collector farms and an offshore transmission backbone. 

Many of those options were offered in the first solicitation but were not selected by the BPU. 

The BPU staff also proposed developers’ plans to inject at least 3,500 MW of wind energy into a major existing substation in Deans in Middlesex County, a choice driven by its location near high electric loads and accessible to lease areas offshore likely to service New Jersey. 

As in the first solicitation, the board has the option of not choosing to select any of the projects submitted this time. “This does not obligate the board to anything,’’ BPU President Joseph Fiordaliso said.