 | 5/6/2013 | Stakeholders Not Blown Away by Proposals to Finance Offshore Wind |
The state now has three competing proposals on how to promote the development of offshore wind, a goal that is appearing increasingly elusive with each passing month.
By 2020, New Jersey had hoped to develop 1,100 megawatts of offshore wind capacity. To date, no project is operational, and only one small pilot offshore wind farm is under consideration by the state agency overseeing the program. It has received a decidedly cool response from regulators.
Offshore wind developers also are unhappy about the pace of the federal government in offering leases off the Jersey coast to build wind farms, a permitting process they have frequently criticized as taking far too long.
It is a frustration shared by clean energy advocates.
Given that it has almost been three years since the state law promoting offshore wind developments was enacted, “it is urgent to complete a successful OSW (Offshore Wind) funding mechanism if the goal of 1,100 megawatts of OSW by 2020 is to be realized,’’ said Thomas Schuster, campaign organizer for the Sierra Club’s Beyond Coal Campaign.
If offshore wind does not happen, however, many in the business community would be happy. They already are worried about the steep costs the state is incurring in its efforts to promote solar energy and other renewable energy projects, an expense that could cost ratepayers more than $5 billion, according to the New Jersey Division of Rate Counsel.
The major impediment to moving forward on the state level is a dispute about how the state should finance offshore wind projects, a cost that will fall on utility ratepayers. An initial financing mechanism developed by offshore developers a few years ago, however, was deemed unworkable. Lawyers for the state argued that its structure would leave it vulnerable to being appropriated by legislators and the governor’s office to plug a hole in state budgets.
Such appropriations are a big worry because both lawmakers and the Christie administration have raided clean energy funds raised from ratepayers repeatedly in the past. More than $700 million in clean energy funds have been diverted to help balance state budgets under Gov. Chris Christie’s tenure. Another $162 million may be appropriated in the upcoming budget to be voted on by lawmakers this June.
With such a possibility, virtually everyone in the effort to develop offshore wind concedes it would be difficult for the developers to line up financing for the projects, which could cost more than $1 billion each. The state hired a consultant, Boston Pacific, to come up with a plan to avoid that eventuality, but its proposal did not receive much support at a public hearing in February.
In response, offshore wind developers agreed to try and come up with a consensus approach to financing so-called offshore renewable energy certificates (ORECs) that the wind farms would receive for the electricity they produce. In addition, Boston Pacific modified its proposal to address concerns raised by stakeholders.
All of the plans include steps to park the money generated by the offshore wind farms in certain accounts or structures that would prevent state appropriation. In comments received by the New Jersey Board of Public Utilities, the proposal winning the most support is a plan put together by Garden State Offshore Energy, which wants to build more than 1,000 megawatts of wind capacity about 18 miles off the Jersey coast.
Its proposal suggests setting up individual escrow accounts at each of the approved developers. It also includes a reserve fund in the escrow account to guard against power suppliers defaulting on their obligation to buy the wind credits, a provision crucial to lining up financing from banks, according to the offshore wind developers.
Without delving into the arcane details of each proposal, the modified plans offered by Boston Pacific and Offshore MW, another offshore wind developer, won little support from the stakeholders.
“We remained concerned that this may ultimately jeopardize the viability . . . [of] building any offshore wind projects,’’ wrote Rob Gibbs, manager of market strategy and policy for Public Service Electric & Gas, a partner with Deepwater Wind in the Garden State Offshore Energy project.
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| 11/15/2012 | SeaRoc successfully install floating wind lidar for Garden State Offshore Energy – SeaZephIR noted as ‘the future of offshore data collection’ for wind farms. |
International marine engineering company SeaRoc are delighted to announce the successful delivery and deployment of a SeaZephIR product to Garden State Offshore Energy (GSOE), a US joint venture project between Deepwater Wind and PSE&G Renewable Generation.
Garden State Offshore Energy is a planned utility scale project of approximately 1,000MW installed capacity, over 20 miles offshore due east of Avalon, NJ.
SeaZephIR has been engineered and installed by SeaRoc to provide an autonomous, low-motion, tension leg platform with integrated wind lidar, allowing offshore wind resource assessments to be performed without the need of a fixed structure or traditional met mast. In addition to the ZephIR 300 wind lidar which provides wind speed and direction measurements from just ten metres (33ft) up to an impressive 200 metres (656ft) above installed position, the buoy measures motion, wave heights and is also equipped with a Class 1 cup anemometer and wind vane. The GSOE buoy has been named the New Jersey Offshore Research Device (NJORD).
SeaZephIR has been developed to deliver finance-grade metocean data with a proven wind lidar on a stable tension leg platform, in a cost-effective and safe manner. The net result allows for effective and efficient development of offshore wind projects such as the GSOE project.
Following a period of some 8 weeks validation off Block Island, USA, the tension leg buoy has been relocated to the New Jersey site to assist in the data collection for the owners of this completely newly designed structure. The validation tests demonstrated a 99% correlation between the SeaZephIR results from the NJORD and the results from Deepwater Wind’s fixed met mast located less than a mile away on Block Island. On 12th November, the NJORD was successfully deployed 23 miles off the coast of Atlantic City in southern New Jersey where it is expected to remain for up to two years to support GSOE’s planned offshore wind farm.
Eric Briar, Managing Director at SeaRoc commented on the installation: “Further to prototype testing in 2011 with Garden State Offshore Energy, and combined with associated research and extensive marine experience, we have re-developed and matured SeaZephIR to the product delivered and an extremely safe, efficient and successful installation was completed in on the 12th November 2012. This is a very exciting period for SeaRoc and the companies involved in SeaZephIR. We have a product that is now engineered to a very high standard and we continue to refine the product where possible.
Combining the ZephIR 300, a proven wind lidar system, with a stable device representative of a fixed platform provides the traceability required for gathering finance-grade wind data, essential in the development of offshore wind energy projects. The buoy itself is designed to survive in 1 in 50 year worst case metocean conditions, with a mooring system capable of being redeployed allowing SeaZephIR to become a roaming offshore anemometry device, as required, either around a single site or between multiple locations.”
Deepwater Wind President Chris van Beek also noted: “The NJORD buoy, with its SeaZephIR technology is an important advance for the offshore wind industry. We validated the results of the system against our fixed met mast on Block Island, and the results were excellent. This technology is the future of offshore data collection."
GSOE Vice President Rob Gibbs added: “GSOE is pleased with the successful deployment of the NJORD and looks forward to using this new but now demonstrated technology for assessing the wind resource off the coast of New Jersey. This is a great example of a public-private partnership between GSOE and the State of New Jersey, which provided critical grant funding for the NJORD.”hnology is the future of offshore data collection.”
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| 2/10/2011 | Developer Considers Building 1,000-Megawatt Offshore Wind Farm |
Garden State Offshore Energy is thinking about nearly tripling the size of its proposed offshore wind farm project, a decision that would mean building 1,000 megawatts of generating capacity more than 16 miles off the coast of Atlantic and Cape May counties.
The company, a joint venture between PSEG Global and Deepwater Wind, is one of four currently vying to build offshore wind farms. Its original proposal, which called for a 350-megawatt project, has won funding from the state of New Jersey and is one of several projects hoping to win approval from the Board of Public Utilities (BPU).
Now, with the state agency set to unveil its rules today governing how it will determine what offshore wind farms move forward, Garden State is considering asking the state to allow it to build practically the entire amount of wind capacity legislation signed into law by Gov. Chris Christie.
"That’s the option we are leaning toward very heavily," said Rob Gibbs, a vice president of Garden State Offshore Energy. Its partner in the venture, Deepwater Wind, recently proposed building a similar scale project in Rhode Island Sound, he noted.
Economies of Scale
The advantage of a utility-sized project involving one company is that it allows the developer to capture the economies of scale that make the undertaking more financially feasible, Gibbs said.
With those economies of scale, Garden State Offshore Energy projects it can save up to 20 percent of the cost of the project, according to Gibbs. If so, that could give the venture a competitive edge over rivals in how it prices the Offshore Renewable Energy Certificates (ORECs). That could be decisive. The BPU wants to price ORECs as cheaply as possible since the cost will be picked up by ratepayers.
In addition, a larger-scale project is probably the only way the state is going to achieve its goal of attracting a wind turbine manufacturer to New Jersey, Gibbs said.
"It’s really the best way to achieve those goals," Gibbs added. The offshore wind legislation includes a provision offering up to $100 million in tax credits to manufacturers as an inducement to jump start New Jersey's green economy. Garden State first talked about its expansion plans at an offshore wind conference in Boston last week.
Other wind developers said it probably is premature to talk about the size of projects given uncertainties about New Jersey’s rules and the federal process of leasing blocks to build offshore wind farms.
"There are a lot of unknowns at this point," said David Gaier, a spokesman for NRG Energy, whose subsidiary, NRG Bluewater Wind, has proposed building a 350-megawatt wind farm off the coast. He noted the number of lease blocks the federal government makes available will largely determine how many turbines any project will be able to build.
"It is for none of us developers to decide how big the project is," agreed Erich Stephens of OffshoreMW, another developer. He said that will be determined by New Jersey and how it adopts its offshore wind regulations.
A Tough Challenge
But Gibbs said the offshore wind legislation has a provision in it requiring any project to have a net positive economic benefit for the state before it can move forward. Because of the high cost of the projects, all of which are expected to have pricetags of $1 billion or more, that will be a tough goal to meet.
"When you concentrate it in one entity, it gives vendors and businesses the confidence they will have four or five years of orders to invest in the state," Gibbs said. "That is what is going to get you over the hurdle. If you cannot attract a big manufacturer here, I’m not sure you can claim credit for job creation."
Stephens argued that wind-turbine manufacturers would prefer to see multiple offshore wind developers to lessen their risk. Otherwise, he said, if a single developer stumbles, so do all the hopes for creation of jobs and a new green economy.
Still, the debate over Garden State Offshore Energy’s proposal underscores how New Jersey is likely to be in the forefront of efforts to build offshore wind farms. Last week, the federal government designated a wide swath of coastal waters as Wind Energy Areas, a step aimed at streamlining the permitting process.
The news was encouraging to environmentalists. "We’re happy with three times the amount of wind," said David Pringle, campaign director of the New Jersey Environmental Federation. "This stuff has to be manufactured somewhere. If we get out in front, we can be manufacturing turbines not only for New Jersey, but Maryland, Virginia and elsewhere."
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| 10/4/2010 | Offshore Wind Monitoring Program Advancing |
Garden State Offshore Energy (GSOE) today announced it was moving forward with plans to install state-of-the-art mobile wind resource assessment equipment 'SeaZephIR' a patented, floating platform with an integrated ZephIR LIDAR system powered by solar and wind energy. The New Jersey Board of Public Utilities recently approved the move, a key step in evaluating the GSOE site.
GSOE has already invested significant resources in developing this advanced technology, and, in response to the board's action, is moving forward with the next steps needed to deploy the equipment this year and begin testing meteorological conditions at its proposed offshore wind farm site 20 miles off the New Jersey coast. SeaZephIR will be installed to assess wind resources and monitor water conditions and will be supplemented with additional resources to survey avian and marine life. The information gathered will be used to evaluate any potential environmental impacts and used as a guide to aid in the design and engineering of GSOE's project.
"Receiving this approval from the BPU and preparing to deploy this advanced technology is an important milestone for our project and New Jersey's efforts to make progress toward actual construction," GSOE Vice President Rob Gibbs said. "SeaZephIR is a state-of-the-art meteorological assessment tool and, coupled with the additional monitoring equipment we are deploying, will provide us with empirical data on the conditions at our proposed project site."
"By using this more cost-efficient, buoy-based system and continuing to share in the cost of this investment, we have volunteered to reduce our rebate award, saving the state $1 million on its rebate program and providing an opportunity for a timely deployment," Gibbs said
The 100-foot long buoy was constructed by renewable energy consultancy, Natural Power, in Norway and arrived in the United States last week. Significant components to the system and logistical deployment will be sourced from New Jersey companies and GSOE will have the primary monitoring devices validated at Block Island, Rhode Island after assembly. The company expects to have the buoy in place off the coast of New Jersey by the end of the year, pending receipt of required permits from various federal agencies.
The winner of New Jersey's 2008 solicitation for a preferred offshore developer, GSOE is a joint venture between PSEG and Deepwater Wind, both leading companies in renewable energy development. As New Jersey's largest energy company and one of the state's largest employers, PSEG has been collaborating with local communities and the State of New Jersey to implement green energy solutions. Deepwater Wind is exclusively focused on offshore wind development throughout the Northeast and has been awarded preferred developer status in Rhode Island to help that state meet its renewable energy goals.
GSOE also announced that it has opened a development office at 36-42 Newark Street, Hoboken, NJ, adding to its corporate parents' presence in New Jersey.
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| 4/29/2010 | Turbine plan hits head wind |
New Jersey’s plans for large offshore wind farms may be delayed into the next decade as new federal permitting rules will require seven to nine years to scrutinize the environmental impact and engineering feasibility, the state’s largest energy company said Wednesday.
The criteria developed by the federal Minerals Management Service earlier this year could jeopardize a project to build hundreds of turbines 20 miles off the coast of Atlantic City, executives at Public Service Enterprise Group said.
“It would not be good for anybody,” said Scott Jennings, president of PSEG Global, a partner in Garden State Offshore Energy. “It would be difficult to attract interest, to attract jobs for this project.”
A spokesman for another wind company, however, said Wednesday that they don’t anticipate such long delays. “We have every reason to believe it would be a two, two-and-a-half-year process,” said David Gaier, of Bluewater Wind of Hoboken.
And a third company, Fishermen’s Energy, said it is still on target to build a smaller project of about 10 turbines almost three miles off the coast of Atlantic City in September 2011. Since the project is in state waters, it would not need MMS approval. It would require approvals from the state Department of Environmental Protection and the U.S. Army Corps of Engineers.
PSEG along with Bluewater Wind and Fishermen’s Energy of Cape May had anticipated constructing almost 300 hundred offshore turbines by 2012 or 2013 after they were selected by the Board of Public Utilities two years ago. The wind farms were the centerpiece of former Gov. Jon S. Corzine’s push for clean energy sources to supply a large portion of the state’s power. He set a 2020 wind power goal of 3,000 megawatts — enough electricity to power 2.4 million of New Jersey’s 3.5 million homes.
Those goals may now be difficult to reach, since only 1,000 megawatts would be generated by the three projects.
PSEG Global’s Garden State Offshore Energy plans to build 96 turbines 16 to 20 miles off Atlantic City and Avalon. Bluewater Wind is looking at 116 turbines 15 to 19 miles off Atlantic City. Fishermen’s Energy wants 70 turbines 10 miles off Atlantic City.
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