Will offshore energy industry ever catch its second wind in NJ?

 A windmill and solar array in Atlantic City. (Mel Evans/AP Photo)

A windmill and solar array in Atlantic City. (Mel Evans/AP Photo)

Next Monday will be the fourth anniversary of Gov. Chris Christie’s signing of a law that proponents hoped would vault New Jersey into being the hub of a new offshore wind industry along the Eastern Seaboard.

But not a single offshore wind project has been built, and the only one to come before state regulators for approval was denied. And while the federal government has taken steps to encourage offshore wind, the state’s efforts have lagged far behind.

The New Jersey Board of Public Utilities still has not adopted regulations that offshore wind developer deem crucial to the industry’s growth in the state. The rules are designed to provide subsidies from ratepayers in the state to the projects, a step needed to make them economically viable.

The rules, allowing developers to earn Offshore Renewable Energy Credits (ORECs) for the electricity their wind turbines produce, were supposed to be in place by March 2011. That has not happened, partly because the BPU and offshore developers cannot agree on how the financing mechanism should be structured.

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“Offshore wind will not be a reality in New Jersey until these actions are taken,’’ said Jeff Tittel, director of the New Jersey Sierra Club.

Tittel, however, also contends that the reason the Christie administration has not moved quickly on offshore wind is because of his national ambitions, that the governor recognizes that offshore wind subsidies are anathema to some segments of the Republican Party.

Others are more hopeful about offshore wind — even with the delays at the state level.

Last week, the federal Bureau of Ocean Management Interior, an arm of the Interior Department, hosted a public seminar on its proposed sale of leases for about 344,000 acres off the coast of New Jersey.

In May, the U.S. Department of Energy announced a $47 million grant over four years to Fishermen’s Energy to help it develop a 25-megawatt offshore wind farm a few miles off of Atlantic City. The grant was finalized this past week—even though the project failed to win approval from the BPU earlier this year.

Fishermen’s Energy is challenging the BPU’s decision in state appellate court, saying it is confident it will be overturned. The BPU said the project would be too pricey for ratepayers and may not be financially viable.

“We’re hopeful that once we get through the process we will be able to stay on schedule for the project,’’ said Rhonda Jackson, communications director for Fishermen’s Energy.

State Senate President Stephen Sweeney (D-Gloucester) also was encouraged by the DOE grant to Fishermen’s Energy.

“Unfortunately, the BPU does not understand the incredible benefit that offshore wind will bring to New Jersey,’’ Sweeney said. “At least we know that the DOE sees the value. There is still hope for offshore wind in New Jersey.’’

The state’s energy master plan endorses the development of offshore wind farms, setting a target of 1,100 megawatts of wind capacity by 2020, a goal that even advocates of the technology say is unlikely to be met.

BPU officials have declined comment on the Fishermen’s Energy project, noting the issue is still pending in the courts.

According to clean-energy advocates, New Jersey has great potential for developing offshore wind farms because of its shallow coastal waters and abundance of wind to power the turbines.

Fishermen’s Energy is still hoping to commence construction on its project in 2015 and to have it operational by 2016. The project is touted as a demonstration project to prove offshore wind is a viable option for producing clean electricity for consumers in New Jersey. Other wind projects proposed off the Jersey coast are much larger in scale, involving building more than 1,000 megawatts of wind farms.


NJ Spotlight, an independent online news service on issues critical to New Jersey, makes its in-depth reporting available to NewsWorks.

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