New Jersey's utility regulator on Wednesday approved two offshore wind power projects with a combined capacity of 3,742-megawatts (MW) whose backers include Invenergy and TotalEnergies.
The offshore wind industry is expected to play a major role in helping several states and U.S. President Joe Biden meet goals to decarbonize the power grid and combat climate change.
But progress was slow last year after offshore developers canceled contracts to sell power in Massachusetts, Connecticut and New Jersey, and threatened to cancel agreements in other states, as soaring inflation, interest rate hikes and supply chain problems increased project costs.
The latest approvals were part of New Jersey's third solicitation for offshore wind, which sought 1,200 to 4,000 megawatts (MW) of power capacity. In total, the state wants about 11,000 MW of offshore wind power by 2040.
"Today's action moves New Jersey closer to achieving Governor Phil Murphy’s goal of reaching 100 percent clean energy by 2035," the New Jersey Board of Public Utilities (BPU) said. The board noted that the two projects would bring about $6.8 billion in economic benefits to the state and provide enough energy to power around 1.8 million homes.
Specifically, the BPU approved the 1,342-MW Attentive Energy Two project and the 2,400-MW Leading Light project as qualified offshore wind projects to receive offshore wind renewable energy certificates, or ORECs.
Attentive Energy Two is a joint venture between units of French oil major TotalEnergies and wind developer Corio Generation.
Leading Light is a partnership between U.S. energy firms Invenergy and energyRe.
"The industry hasn't disappeared, the industry is moving forward," Invenergy CEO Michael Polsky said in an interview, noting that Leading Light is the first U.S. offshore wind project backed by American companies to be awarded a competitive contract.
The total electrical bill impact of the two projects for residential customers will be $6.84 per month, beginning once these offshore wind facilities are operational and delivering clean electricity to the New Jersey grid, the BPU said in a statement.
Last October, Danish energy firm Orsted, the world's biggest offshore wind firm, canceled two offshore wind farms off New Jersey - the 1,100-MW Ocean Winds 1 and 1,148-MW Ocean Winds 2 - due to soaring inflation, rising interest rates and delays in securing ships needed to build the projects.
Orsted announced write-offs of up to $5.6 billion due in large part to the Ocean Winds cancellations.
Following Orsted's decision, Governor Murphy last November directed the BPU to accelerate the state’s fourth offshore wind solicitation, with project awards anticipated in early 2025.
The BPU said it selected Ocean Wind 1 in June 2019 in its first offshore wind solicitation and Ocean Wind 2 and Atlantic Shores 1 in June 2021 in its second solicitation.
Atlantic Shores 1 is a joint venture between units of European energy firms Shell and Electricite de France.
(Reuters - Reporting by Scott DiSavino and Nichola Groom; Editing by Chris Reese, Jonathan Oatis and and Leslie Adler)