The state Board of Public Utilities announced Friday it has selected Ocean Wind, an offshore wind energy project proposed by Ørsted with support from Public Service Enterprise Group, to develop an 1,100 MW offshore wind farm.
Ørsted and PSEG officials say the farm will power more than half a million New Jersey homes and will contribute significantly to Gov. Phil Murphy’s ambitious renewable energy goal of supplying more than 1.5 million homes with offshore wind power by 2030.
Construction on Ocean Wind, which will be located 15 miles off the coast of Atlantic City, is expected to start in the early 2020s, with the wind farm operational in 2024, Ørsted said.
“Today’s announcement firmly establishes a fast-growing global industry in New Jersey, which will create jobs and supply chain in the state,” Thomas Brostrom, CEO of Ørsted U.S. Offshore Wind and president of Ørsted North America, said.
Brostrom talked with ROI-NJ about the project and how it will benefit the state’s push to clean renewable energy while giving a boost to the economy around the Atlantic City area.
ROI-NJ: Bringing a wind farm to New Jersey has been a long process. Talk a little bit about the road to this announcement?
Thomas Brostrom: We’ve been working hard at our Ocean Wind project for the better part of three years. It was a tremendous effort to get a proposal in just before the new year. That the BPU selected us to build an 1,100-megawatt wind farm is hard to grasp right now. We are super excited about it. We also are excited that they have trust in us to do it.
ROI: Speaking of trust – or just taking a chance – Ørsted, which is headquartered in Denmark, did that by coming here, not knowing if this day would ever come. Talk about taking that risk?
TB: We’ve been in the U.S. for four years. We set up shop here at a point in time where the market was pretty much dead. Since then, a lot of good things have been happening and New Jersey has been at the forefront of it. This means we will grow a lot, there will be a lot of new employees into our organization, many of which will be for the Ocean Wind project. So, today is a very good day.
ROI: Let’s talk about the size and scale of Ocean Wind for those who don’t understand the amount of electricity it could produce. You say 1,100 megawatts, you could say 100 or 10,000 megawatts and I’m not sure many people would understand the difference in scale. Give us a sense of how this will impact life in New Jersey?
TB: An 1,100-megawatt wind farm could potentially supply close to 600,000 households in the New Jersey, to get a feel for what that means. That’s obviously significant. It means that you are really starting the transitioning from fossil fuels into significantly more clean energy sources, such as offshore wind. It also means that you can start an industry in the state of New Jersey because you need a lot of skilled workers to be able to do this. Obviously, for places such as Atlantic City and elsewhere, this will be a pretty big boost for the economy.
ROI: How big a boost? Is New Jersey too late to the game or can it still benefit?
TB: I think this is only the start of the industry. There’s a little bit of a race between the states to come to grab some of the early first-move benefits of setting up a local supply chain. This is one of the missing pieces in an emerging industry. You still need a local supply chain. I think New Jersey is going to be well positioned to start growing that tremendously.
ROI: Talk about a timeline for this growth and how it works with Gov. Murphy’s ambitious clean energy goals?
TB: We still have to obtain final permits. We’ll have to spend one to two years before we can have all the permits in place. To go out and do the offshore construction will take another couple of years. We expect to have all turbines up and spinning by 2024.
When you looked at some of the clean energy targets that have been set by Gov. Murphy, you still need a lot more renewable energy. And when you are in New Jersey, the dominant source of renewable energy you have, is wind energy.
I would certainly expect more projects to come after we start really building up the local supply chain. New Jersey will benefit further from that. So, it would be my expectation that this is just the first project of many.
ROI: The idea of a wind farm project off the coast of Atlantic City has been around for many years. Why do you think it was finally approved?
TB: I think the timing is right for New Jersey and for the U.S. in general. Costs have trended down significantly. More than 60% of the cost has been taken out over the last five years. Now, it’s much more cost competitive. I think that’s a key driver. Also, seeing (our) Block Island Wind Farm (in Rhode Island), the first operational wind farms in the U.S. working, built a lot of trust that this industry can work and be built out at scale.
We also have been listening to the many stakeholders (who had objections). We’ve been moving wind farms out where you barely can see the wind turbines. We’ve been working with the fishing industry and (those associated with) marine life in general.
ROI: This farm sounds as if it is about more than just energy. Talk about its potential overarching impact?
TB: You can certainly talk about its connection to climate change when you’re in a coastal zone. You have to acknowledge that and take that into account. I think in the next decade or so, you really are going to see the impact of climate change. One estimate is you’re going to have one foot of sea level rise up and down the East Coast. That starts to have an impact on real estate and the value of these communities.
We’ve shown that we can help revitalize some of the coastal areas in terms of economic development. It’s just another factor that I think is really tangible now. And I think for that reason, this is probably the right time.
ROI: I can hear your optimism – but I also know this is New Jersey. And people here remember when the solar industry was going to be the chief source of clean energy about a decade ago. That didn’t work out as early predictors thought it would. How is wind energy different?
TB: There’s a couple of things. Costs have come down now to a pretty good level and the reliability of wind is pretty high. The days when the wind doesn’t blow out at sea are very rare. So, I think that’s a key factor.
And the alternatives, in my view, are not that great. We certainly know in Europe, when you have to be new build nuclear or coal, prices are higher than offshore wind. You can obviously extend the lifetime of some of those existing facilities, but over time, offshore wind is just more competitive in terms of price. I think that’s a key argument for why this will last.
ROI: Let’s talk about jobs in New Jersey. There’s obviously going to be a need to hire lots of people to build the farm – and then a need to hire more to help run and sustain it. Give us an idea of how many jobs this will bring to the state?
TB: We expect over 3,000 direct jobs a year through the construction phase and we are talking to other suppliers – local and international players – to come and help us set up shop in New Jersey. Once we have the wind farm built, we’ll have people in the Atlantic City area servicing the wind farm for 30 plus years.
This will be a catalyst for a lot of new jobs. We have invested a lot into training and higher education because you want to have a skilled workforce that can work in this industry. We are investing into training facilities.
ROI: You’re going to be working with Joe Jingoli and some of the training programs he already has established in Atlantic City that make sure residents are trained for career-type jobs. How important is it for your company to come in and make sure that you’re helping the local residents get the training they need so they can participate in this project?
TB: That is very important to us. When you come into a community, you want those who have been impacted to have a positive experience. We want to work with the people in those communities. We want to have a local workforce. What Jingoli is doing with his local programs is very meaningful and something we want to support. So, we have partnered up with Jingoli and we’re pretty excited about that.