U.S. gives go-ahead for Orsted’s New Jersey offshore wind farm to start construction

The wind farm would power 500,000 homes. Other approvals remain to be granted, but Orsted plans to start construction this fall.

Land-based windmills turn in the wind in Atlantic City, N.J., on April 28, 2022.

Land-based windmills turn in the wind in Atlantic City, N.J., on April 28, 2022. On July 3, 2023, Atlantic Shores, the approved developer of New Jersey's third offshore wind farm, said it, too, wants a tax break or other financial assistance, hinting that its project might not be able to be done without the kind of assistance New Jersey lawmakers granted the week before to a competitor, Orsted, which has approval to build two of the state's three approved offshore wind farms. (AP Photo/Wayne Parry)

The federal government gave the go-ahead Wednesday for New Jersey’s first offshore wind farm to begin construction, clearing the way for the first of at least three — and likely many more — such projects in a state trying to become the East Coast leader in wind energy.

The U.S. Bureau of Ocean Energy Management approved a construction and operations plan for Ocean Wind I, a wind farm to be built by Danish wind energy company Orsted between 13 and 15 miles off the coast of Atlantic City. The wind farm would power 500,000 homes.

Additional approvals from the Bureau of Ocean Energy Management, the U.S. Army Corps of Engineers, the National Marine Fisheries Service, and the U.S. Environmental Protection Agency still must be obtained, which Orsted estimates will happen by the second quarter of 2024.

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The project already has all of the major state permits it needs, said Larry Hajna, a spokesman for the New Jersey Department of Environmental Protection. Two minor state permits remain outstanding.

The Bureau of Ocean Energy Management’s action represents the third federal approval of a commercial-scale offshore wind energy project in the U.S., joining the Vineyard Wind project in Massachusetts and the South Fork Wind project in New York, both of which are now under construction.

Orsted said it plans to begin construction in New Jersey this fall, “delivering on the promise of good-paying jobs, local investment and clean energy,” said David Hardy, the company’s CEO for the Americas.

“Since day one, the Biden-Harris administration has worked to jump-start the offshore wind industry across the country, and today’s approval for the Ocean Wind I project is another milestone in our efforts to create good-paying union jobs while combating climate change and powering our nation,” said U.S. Interior Secretary Deb Haaland.

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New Jersey Gov. Phil Murphy, a Democrat, called the federal approval “a pivotal inflection point not just for Orsted, but for New Jersey’s nation-leading offshore wind industry as a whole.”

The Bureau of Ocean Energy Management said Orsted will compensate fishing businesses for lost revenues and reimburse them for lost or damaged gear. The company also will create a navigational safety fund for equipment upgrades, the bureau said.

The project would place nearly 100 wind turbines off the coast of southern New Jersey, where they would be visible from the tourist havens of Atlantic City and Ocean City.

That has generated fierce opposition from community groups, most of whom also blame site preparation work for a spate of whale deaths since December. At least 60 whales have died on the U.S. East Coast since then. But three federal and one state agency all say there is no evidence linking the deaths with offshore wind preparations.

At the request of elected officials who want a moratorium on offshore wind projects, the U.S. Government Accountability Office said last month it would “review matters relating to the potential impacts of offshore wind energy development” in the northern Atlantic area between Maine and New Jersey.

Orsted also has approval from New Jersey to build a second wind farm, which has yet to obtain all its approvals. And a third project, Atlantic Shores, also has state approval but still needs federal permission to begin.

Ocean Wind I’s final major approval came just days after the New Jersey Legislature approved a bill last week that would give Orsted a tax break by letting it keep federal tax credits that the company otherwise would have had to pass on to New Jersey ratepayers. The bill is awaiting action by the governor.

The tax break only applies to Ocean Wind I. But on Monday, Atlantic Shore said it, too, wants government financial aid, warning that its project and the jobs it would create are “at risk” without the incentives.

Atlantic Shores is a joint partnership between Shell New Energies US LLC and EDF-RE Offshore Development LLC.

The work that will begin this fall on Ocean Wind I includes laying its electrical transmission cable and building onshore electrical substations. The tall structures that will support wind turbines, called monopiles, are being welded, sandblasted and painted at EEW American Offshore Structures’ facility at the Port of Paulsboro across the Delaware River from Philadelphia International Airport.

Orsted plans to have the monopiles installed in 2024 and to have power flowing from the project to customers by 2025.

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