Thumbs down on Atlantic City wind farm

It looks like it’s still a no-go for the Fishermen’s Atlantic City Wind Farm.

At least that was the conclusion reached by consultant retained by the New Jersey Board of Public Utilities to evaluate the state’s first offshore wind farm, which is proposed to be built 2.8 miles off the coast of Atlantic City.

“In summary, we remain concerned with the significant level of subsidy that would be paid by ratepayers for a project that poses significant technical risk,’’ said the final report by Boston Pacific Company Inc. and Outsmart BV, which reviewed the company’s application.

The conclusion marks the latest setback for the Fishermen’s project, which has been lambasted in previous reports by Boston Pacific and still another by a consultant retained by the New Jersey Division of Rate Counsel.

In essence, both reports concluded that the Fishermen’s project would increase rates for electric customers without proving any net economic benefits, such as more “green” manufacturing jobs.

Ironically, the report, dated Dec. 12, came out on the same day that the Obama administration identified Fishermen’s Atlantic City Wind Farm as one of seven projects nationwide to receive up to $4 million in funding from the U.S. Department of Energy to complete engineering, site evaluation and other planning for the project.

The Christie administration and Democratic-controlled Legislature have touted offshore wind farms as a way to increase New Jersey’s energy independence, possibly reducing sky-high energy costs in the meantime. Those efforts, however, have been frustrated by lengthy permitting delays at the federal level as well as the inability of state officials to develop a funding mechanism to promote the development of offshore wind farms.

Without such a mechanism, offshore-wind developers say it will be impossible to line up the financing from Wall Street to fund the projects, which could cost more than $1 billion to build.

To some business advocates, that problem with financing might not be a bad thing. They worry that dedicating ratepayers’ subsidies to offshore wind projects will drive up energy costs for businesses in a state already burdened with high electricity costs. For the most part, those business advocates have supported the Christie administration’s efforts to build new plans fired by natural gass, even they, too, would wind up being subsidized by ratepayers.

Repeated calls to Fishermen’s Energy representatives were not returned.

One issue cited by the consultants is technical risks associated with the Fishermen’s project, which would use wind turbines that have not been commercially proven.

“The overarching concern is that ratepayers will be paying a high subsidy for a high technical risk: that is, a 25-megawatt project that uses a turbine with a commercial operating history and employs a technology that has not been use for this particular type of turbine,’’ according to the report.

The Fisherman’s project is the first of about four proposals to build wind farms off the Jersey coast, a process that has banded clean-energy advocates with the Christie administration in efforts to develop an offshore wind industry. The state’s energy master plan calls for development of at least 1,100 megawatts of offshore wind capacity by 2020, a goal many say will be hard to achieve.

 

Related Links

Application by Fishermen’s Atlantic City Wind Farm

Offshore Wind Developer May Set Up Shop in New Jersey

Offshore Wind Farms Face Political, Economic Headwinds