Offshore Wind Promised New Jobs and Economic Development. Where Are They?

Source: By TOM JOHNSON, NY Spotlight • Posted: Monday, September 14, 2020

New doubts are raised about benefits from developers as NJ backs construction plans for turbines and more

Credit: (AP Photo/Stephan Savoia)
File photo: July 27, 2015, construction of the nation’s first offshore wind farm off Block Island, Rhode Island

With New Jersey ramping up its efforts to develop a robust offshore wind program, new doubts have been raised over when and whether the projects will deliver the significant economic benefits and jobs touted by developers.

The issue became public Wednesday when the state opened a second solicitation to build offshore wind farms off the Jersey coast and prominent legislators unexpectedly called on state regulators to immediately suspend its review of the first and only offshore wind project to be approved by the Board of Public Utilities.

It follows a letter from a group representing commercial fishermen in New Jersey sent to the BPU and state Department of Environmental Protection, urging the agency to establish a five-year moratorium on the development of offshore wind projects, citing concerns over their impact on New Jersey’s lucrative commercial fishery industry. A similar letter subsequently was sent to the Bureau of Ocean Energy Management, the federal agency overseeing offshore wind development, echoing a call for a national moratorium.

These issues have been bubbling for months in behind-the-scene discussions among lawmakers, administration officials and Ørsted, according to participants. The focus has been over the $1 billion, 1,100-megawatt Ocean Wind project located 15 miles off Atlantic City, according to Assemblyman John Burzichelli, a powerful Democrat from South Jersey, who signed the letter to BPU with running mates Assemblyman Adam Taliaferro and Senate President Stephen Sweeney.

“We’re not happy,’’ said Burzichelli, who was a sponsor of the original law establishing the offshore wind development program a decade ago. The lawmakers’ frustration arises out of their view that Ørsted has not yet fulfilled commitments it made when it was awarded the first offshore wind project by BPU last year, he said.

‘Are we going to get what they promised?’

“We have to get this right, right out of the box,’’ said Burzichelli, referring to the commitments made by the developer, which heavily influenced the state’s decision to award the first offshore wind farm project to Ørsted. “Are we going to get what they promised?’’

Ørsted declined comment, referring to its statement last week that argues the company is still in the early stages of building the state’s first commercial wind farm and remains focused on the jobs, economic development and environmental benefits.

“We are committed to delivering on all of our commitments in our bid to the New Jersey Board of Public Utilities,’’ the company said.

Among other things, Ørsted, a Danish company that is one of the global leaders in offshore wind projects, signed a memorandum of understanding with EEW, a German company, to build a manufacturing facility in Paulsboro, for monopoles — steel structures on which wind turbines often are mounted.

The project has not been built. Burzichelli said he worries the delay in executing a final agreement between Ørsted and EEW may cost New Jersey the opportunity to be the hub of monopole manufacturing along the Eastern Seaboard, adding it is unlikely more than one such facility will be needed. “We are not seeing enough progress,’’ he said.

Ørsted has emerged as the biggest player along the Eastern Seaboard in pushing offshore wind projects, holding multiple leases to build wind farms off New Jersey and other states. The company operates the only existing offshore wind farm off Rhode Island.

Worried about higher energy bills

At the same time, business interests, consumer advocates and others including fisherman are worried the rapid pace of development of these projects will increase what they say are already high energy bills and whether they are worth the costs to consumers, who will subsidize their development by surcharges on their electric bills.

Under the offshore wind-enabling law, a company seeking ratepayer subsidies to finance its proposal must demonstrate the project will produce net economic benefits, such as new jobs and investments in the region, if approved.

“Bottom line, this is a big investment by the state and ratepayers,’’ Burzichelli said, adding that Ørsted is going to make a handsome return on the project. He wants to ensure the company lives up to the commitments it made to BPU, which awarded the project — including hiring local union members.

Paul Patterson, an energy analyst at Glenrock Associates in New York, said it is not unusual for the public to debate the benefits of a major infrastructure project. “It is a little disconcerting that this early in the process, people are questioning whether it will produce the promised economic benefits,’’ he said.

The BPU declined to respond to repeated requests for comment.

In letters to state and federal agencies, fishermen said too many unanswered questions remain over the impact of the wind farms offshore on fisheries, according to Scot Mackey, a lobbyist representing the Garden State Seafood Organization.

He agreed with Sweeney that the creation of jobs from the offshore wind projects remains illusive, noting some studies in Europe have suggested the sector has not delivered as many jobs as projected. “There’s a lot more work that needs to be done,’’ Mackey said.

Some clean-energy advocates said the dispute threatens to delay the state’s efforts to advance the offshore wind industry. “This sends a chill through the whole sector. More importantly, it could hold up the industry in New Jersey,’’ said Jeff Tittel, director of the New Jersey Sierra Club.