New Jersey Awards 2 Offshore Wind Contracts, Reversing a Setback

Why It Matters

The awards, by the state’s Board of Public Utilities, came just three months after Orsted, one of the world’s biggest developers of offshore wind farms, backed out of two contracts to supply power to New Jersey.

That abrupt withdrawal was a significant setback to the state’s goal of weaning off fossil fuels over the next three decades. Gov. Philip D. Murphy, a Democrat, set a goal of getting 11,000 megawatts of power — enough to power more than 5 million homes — from offshore wind by 2040.

“This investment in clean energy is really about the future of New Jersey and our fight against climate change,” said Christine Guhl-Sadovy, a former Murphy aide whom he appointed president of the utilities board last year.

What It Will Cost

The cost of obtaining offshore wind power has risen sharply because of worldwide inflation, higher interest rates and disruptions of supply chains. Orsted and other wind farm developers have cited those factors as reasons for canceling contracts.

Under the contracts New Jersey awarded on Wednesday, the monthly bill of the typical residential customer in New Jersey would go up by almost $7, the utilities board estimated. One of the canceled Orsted contracts was estimated to be about half as costly to consumers.

The Details

The state chose two of the three remaining bidders in its latest solicitation for electricity from offshore wind.

One, Leading Light Wind, would be the first U.S.-led operation to build a wind farm in the ocean and deliver power from it. Leading Light is a partnership between Invenergy and energyRe, a New York-based company chaired by Jeff Blau, the chief executive of Related Companies, one of the biggest developers in New York City.

The other winning bidder, Attentive Energy Two, is a partnership between TotalEnergies, a French utility, and London-based Corio Generation.

The two projects together would be capable of producing about 3,470 megawatts of electricity.

In addition, New Jersey still has a contract with another offshore project, Atlantic Shores, for 1,510 megawatts. Combined, the three projects could produce more than one-third of the state’s 2040 target.

What The Critics Say

Elected officials who represent parts of the Jersey Shore, including Representative Jeff Van Drew, a Republican, have ardently opposed Mr. Murphy’s offshore wind plans.

On Tuesday, Mr. Van Drew wrote to the governor calling on him to “drop your unrealistic Green New Deal agenda before you cause irreversible damage to our state’s economy, thriving ocean-based industries, and delicate marine ecosystems.”

What’s Next?

Kris Ohleth, director of the Special Initiative on Offshore Wind, a supporter of the state’s plan, said that New Jersey still had work to do to get back on pace toward its offshore wind goals. “They need to make up some lost ground,” she said.

But she said that she expected the state to respond by accelerating its granting of more contracts, rather than by paring back its ambitions.

The state’s goals “are not out of reach,” Ms. Ohleth said, then added: “They are far out, so it’s kind of hard to say.”