Officials in New Jersey have selected Orsted as the winner in the state’s first offshore wind solicitation with the 1100MW Ocean Wind project.
The New Jersey Board of Public Utilities received 14 bids from three developers for the solicitation, which was issued in September 2018.
The two other bidders were the Shell-EDF joint venture Atlantic Shores and Equinor’s Boardwalk Wind.
Before reaching its final decision, the NJBPU considered four options: Orsted’s 1.1GW Ocean Wind project, an 1100MW portfolio of projects comprising Ocean Wind and Atlantic Shores, a 1.2GW combination of Orsted’s Ocean Wind and Atlantic Shores and another 1.2GW combination of Orsted’s Ocean Wind and Equinor’s Boardwalk Wind.
Evaluation criteria included offshore wind renewable energy certificates (OREC) purchase price, economic impact, ratepayer impact, environmental impact, the strength of guarantees for economic impact and the likelihood of successful commercial operation.
NJBPU said Orsted’s Ocean Wind project offered a first year OREC price of $98.10 per megawatt-hour.
The levelized net OREC cost – which represents the actual OREC costs paid by ratepayers after energy and capacity revenues are refunded to ratepayers – is estimated at $46.46/MWh, it said.
Orsted offshore chief executive Martin Neubert said: “We’re delighted that New Jersey has chosen Orsted to build the state’s first large-scale offshore wind farm.
“We look forward to delivering Ocean Wind which will be the first offshore wind farm in the US to cross the 1GW mark and will contribute significantly to meeting Governor Murphy’s ambitious renewable energy goals.”
Orsted US Offshore Wind president Thomas Brostrom said: “Today’s announcement firmly establishes a fast-growing global industry in New Jersey, which will create jobs and supply chain in the state.
“Ocean Wind will ensure that the state and its residents not only benefit from clean, renewable power, but that they reap the rewards of being an early mover at scale in the offshore wind industry as it grows in the US.”
The project is still subject to a final investment decision, and is expected to be completed by 2024, the company said.
It will work with Public Service Enterprise Group’s (PSEG) non-utility affiliates, which will provide energy management services and potential lease of land for use in the project development and execution phase.
PSEG, which serves 2.2 million electricity customers in New Jersey and has a long development partnership with Orsted, has an option to become an equity investor in the Ocean Wind project.
New Jersey Governor Phil Murphy said: “Today’s historic announcement will revolutionize the offshore wind industry here in New Jersey and along the entire east coast.
“Building our offshore wind industry will create thousands of jobs, invite new investments into our state, and put us on a path to reaching our goal of 3500MW of offshore wind by 2030.
“This award is a monumental step in making New Jersey a global leader in offshore wind development and deployment.”
NJBPU president Joseph Fiordaliso said: “I think this is exciting. I think this is historic. Offshore wind will benefit the citizens of New Jersey not only environmentally but also economically.”
He added that getting to this point in the state’s first offshore wind solicitation was an “emotional moment” for the board.
“I really am having difficulty grasping the reality of the moment, after so many years that New Jersey is going to be finally open for business as far as offshore wind is concerned,” he said.
“Ocean Wind provides, I believe, the best chance of successful development due to Orsted’s depth of knowledge as well as global and regional experience and advanced stage in planning.
“It also brings significant economic benefits as this solicitation is expected to result in 15,000 jobs during the life of the project and $1.17bn in economic development.”
Governor Murphy has committed to sourcing 35% of the state’s electricity from renewable energy sources by 2025, rising to 50% by 2030, with 3.5GW coming from offshore wind.