Offshore wind energy industry sees federal leasing jumpstarting New Jersey rules

Source: By Mary Powers, Platts • Posted: Thursday, October 1, 2015

Washington (Platts)–The federal government’s plan to offer 343,833 acres off the coast of New Jersey for commercial wind energy generation on November 9 is raising the hopes of industry participants that the development of rules needed to advance the state’s own program will finally get underway.

The New Jersey wind area is located about seven nautical miles from shore on the Outer Continental Shelf and has been divided into two lease areas. The south lease area includes 160,480 acres and the north lease area has 183,353 acres. The plan was announced Wednesday.

“It opens up the door for New Jersey to move expeditiously,” Paul Gallagher, general counsel for Fishermen’s Energy, said Thursday in an interview. Fishermen’s Energy is an offshore wind developer founded by the New Jersey’s commercial fishing industry.

The New Jersey Legislature in 2010 passed the Offshore Wind and Economic Development Act, which established an offshore renewable energy certificate program that requires a percentage of power sold in the state to come from offshore wind farms.

However, the New Jersey Board of Public Utilities has yet to develop the rules to implement the law.

In August, Richard Morz, chairman of the BPU, said a consultant was being hired to help the board structure the financial mechanism to be included in the rules.

The financing mechanism will establish how developers are paid and it is needed before they can access the capital to develop such projects, the BPU said previously.

The US Bureau of Ocean Energy Management will consider such factors as whether a bidder has obtained a power purchase agreement or a New Jersey offshore renewable energy certificate award when determining the winners, the federal agency said.

There should be time to have the rules developed for when they are needed, sources said. “The industry needs them to get moving and moving now,” Gallagher said.

BOEM’s announcement removes one more barrier to offshore wind in New Jersey, Doug O’Malley, director of Environment New Jersey, said. “With this federal action, it makes it even more critical for the Christie Administration to move forward with the long-stalled offshore wind program,” he said.

In August, 40 organizations, legislators, and local officials urged Governor Chris Christie to make offshore wind a key part of the state’s energy supply, five years after he signed the offshore wind energy bill.

The letter makes note of Christie remarks that developing New Jersey’s renewable energy resources and industry is critical to the state’s manufacturing and technology future.

The letter asked Christie to commit to fulfilling the goal of the state’s energy master plan of developing 3,000 MW of offshore wind. It also asked him to advance Fishermen’s Energy’s proposed 25-MW pilot project off the coast of Atlantic City.

Fishermen’s Energy is one of 13 companies that BOEM said has qualified legally, technically and financially to participate in the lease sale.

The others are Convalt Energy, GSOE I, EDF Renewable Energy Development, Entergy Management, Green Sail Energy, Iberdrola Renewables, New Jersey Offshore Wind, OffshoreMW, RES America Developments, Sea Breeze Energy, US Mainstream Renewable Power and US Wind.

The BPU did not respond to a request for comment Thursday.