BPU gives new offshore wind funding thumbs-up, but Nautilus project gets thumbs-down

The state Board of Public Utilities voted to adopt a new funding mechanism for offshore wind, but denied the application of the Nautilus Offshore Wind project at a meeting Tuesday.

The funding mechanism, the Offshore Wind Renewable Energy Certificate, establishes the process by which all offshore wind projects will be funded and how revenues will flow back to ratepayers, according to the BPU.

The state is still accepting applications for the first round of offshore wind, a total of 1,100 megawatts, and an outside consultant will be chosen soon to help with the selection process.

BPU President Joseph Fiordaliso said: “We are more committed than ever to fulfilling Gov. (Phil) Murphy’s bold vision of a robust offshore wind program and clean energy future, and we look forward to receiving applications for our 1,100 MW solicitation before the end of the year. With today’s approval of an offshore wind funding mechanism, we anticipate significant benefits for the state at the best possible cost.”

The denial of the Nautilus project, a partnership between Fishermen’s Energy — which has been at the forefront of the wind energy industry in the state — and French company EDF Renewables, is the third blow for the 25 MW project.

The BPU said in its statement the project, permitted for installation off Atlantic City’s coast, has become too small and too expensive for the agency to consider amid a more ambitious wind energy plan in the state.

In the past, Fishermen’s Energy blamed Gov. Chris Christie’s administration for blocking its project. But, despite Murphy’s administration in place, the company has again been denied.

If the BPU did allow the project as a pilot program, as it was originally intended in 2009, it would be an exception among applicants.

“This pilot project, originally proposed in 2009, does not demonstrate the economic and environmental benefits required under the Offshore Wind Economic Development Act for the state to commit ratepayer funds,” the BPU said.

“Unfortunately, the Nautilus demonstration project did not meet the net economic benefits standard as required by OWEDA, and the board voted down the application,” Fiordaliso said. “We look forward to reviewing the applications for 1,100 MW of offshore wind and anticipate greater net benefits with larger-scale projects. The award will cement New Jersey’s place as the national epicenter of the offshore wind industry.”

Doug Copeland, EDF regional development manager, said the state is missing out on an opportunity to lead in offshore wind by rejecting the project.

“The New Jersey Board of Public Utilities’ decision on Nautilus Offshore Wind is disappointing, to say the least,” he said. “With permitting already in place, Nautilus is the only project capable of giving New Jersey an early lead in the offshore wind space race. This rejection will delay workers’ access to local and real-world training on offshore wind construction and slow early investments in critical supply chain infrastructure needed to support more large-scale projects. We want to thank the greater Atlantic City community and labor leaders for their support through this process and hope to work with New Jersey to identify other opportunities for the future.”

But the BPU has said that, because of other states leading in offshore wind, the Nautilus project would, in fact, not help.

Murphy touted the passage of the OREC and its role in helping the state reach its offshore goal by 2050.

“Today’s actions demonstrate my administration’s focus on developing a robust offshore wind market and achieving 3,500 MW of offshore wind and 100 percent clean energy by 2050,” he said. “The offshore wind program is a key component of the state’s strategic economic growth plan and a critical strategy to mitigate the impacts of climate change.”

EDF continues its efforts

Despite being rejected by the state’s Board of Public Utilities for its Nautilus offshore wind project with Fishermen’s Energy on Tuesday, EDF Renewables announced a new partnership with Shell to pursue even more offshore wind capacity.

EDF Renewables North America and Shell New Energies US LLC announced Wednesday they have formed a 50/50 joint venture, Atlantic Shores Offshore Wind LLC to co-develop a lease area with, potentially, 2,500 megawatts of offshore wind energy.

The lease comprises 183,353 acres about eight miles off the coast of Atlantic City, according to a statement from the company.

“Shell has bold ambitions to grow our renewable power business and we see great potential in U.S. offshore wind,” said Dorine Bosman, vice president of Shell Wind Development. “Gaining access to this acreage in New Jersey complements our successful entry to Massachusetts and our existing renewable generation business. Building on the strength of our brand and global presence allows us to continue providing our customers with more and cleaner energy.”

Shell has five onshore wind projects in North America and one offshore in Europe. EDF, on the other hand, has a large European presence and manages about 10 gigwatts of wind energy.

“The opportunity supports the EDF Group’s aim to double global renewable capacity to 50 gigawatts by 2030. It solidifies EDF Renewables ambitions to leverage its depth of experience in the European offshore wind market in the emerging U.S. market,” said Tristan Grimbert, CEO and president of EDF Renewables North America.  “As the costs of offshore wind are declining, the U.S. offshore wind industry is quickly advancing with strong federal and state support. The industry is well-positioned to meaningfully contribute to the New York and New Jersey economies through employment and supply chain opportunities.”