When Gov. Phil Murphy announced in February his ambitious plan of having 7,500 megawatts of offshore wind energy by 2035, he talked of all of the benefits it would bring to the state.
Murphy didn’t provide the details of how it would get done. Wednesday afternoon, that became a little clearer.
In what all involved are calling a historic and landmark agreement, the New Jersey Board of Public Utilities formally requested that the state create an offshore wind transmission infrastructure in conjunction with its regional grid operator, PJM Interconnected.
The idea, called the State Agreement Approach, is not currently being used by any states.
In simple English, it means this: The BPU and PJM will work together to solicit bids to build the transmission infrastructure (underwater cable routes) necessary for carrying the offshore wind-generated energy to the on-shore power grid.
Once completed, it means future projects will only have to tap into existing transmission infrastructure, instead of having to build a new system — or a new road to the land, so to speak — each time.
Why is that important?
Janice Fuller, president, Mid-Atlantic, of Anbaric Development Partners, a leading developer of electric transmission projects — which will bid for the opportunity to build the underwater cables that will be used to transmit the power — broke it down for us:
- Environmental impact: The transmission infrastructure project will cause less disruption to the ocean floor. And, since each subsequent windfarm will be able to tap into it, the disruption will be a one-time event;
- Fishing: For the reasons noted above, there will be less disruption to potentially sensitive commercial and recreational fishing areas;
- Planning: New Jersey will figure where it makes sense to connect these transmission cables on land, enabling developers such as Anbaric to know where the power needs to get to, thus enabling them to create the most environmentally friendly and cost-effective path to get there;
- Redundancy: Should something go wrong with a cable, windfarms will be able to easily connect to others, just as a driver in a traffic jam can switch to another roadway;
- National leader: Every other state takes a piecemeal approach. This is a way New Jersey can lead the way — and become more attractive to other windfarm companies.
BPU President Joseph Fiordaliso said the process will allow the BPU to determine how a coordinated approach can lead to more cost-effective, efficient transmission solutions that minimize the environmental impacts of bringing wind energy ashore.
The BPU, he said, will assess whether proposals for any of these components can meet the state’s offshore wind policy goals in an economically efficient, environmentally sensitive and timely manner.
There are no financial or ratepayer obligations with the announcement, the BPU said. In fact, the competitive solicitation process contains extensive consumer protections, including the ability to control cost and timing implications by incorporating transmission upgrades in a phased manner.
The BPU intends to work with PJM to open the solicitation in 2021 and evaluate competitive project proposals in concert with the grid operator, including any cost considerations. At the end of the process, NJBPU will decide whether to proceed with any combination of the proposed transmission projects, but reserves the right to terminate the process at any time without making a selection.
Fiordaliso said the State Agreement Approach is a step toward meeting Murphy’s 7,500 MW goal.
“Our actions today reflect New Jersey’s leadership in innovative clean energy development, as well as our commitment to expanding renewable energy quickly and responsibly to combat climate change,” he said. “By exploring offshore wind transmission options through the State Agreement Approach, we’ll work collaboratively with PJM to identify potential solutions that meet the state’s needs and ensure the best value for ratepayers.
“PJM has been tremendously helpful throughout this process and will be instrumental to our success in achieving Gov. Murphy’s vision for 100% clean energy by 2050.”
PJM CEO Manu Asthana said the State Agreement Approach was written broadly to accommodate the breadth and diversity of policies that different states might pursue.
“It is an existing tool that states can use to leverage PJM’s regional transmission planning expertise,” he said. “In this case, we are pleased to be able to help New Jersey advance its offshore wind objectives.”
Fuller said it was a historic decision to further New Jersey as the clear national leader in offshore wind development.
“As the principal industry advocate for a planned, independent transmission system that protects ratepayers and grows the industry, Anbaric is thrilled to see the BPU take this enormous step forward,” she said. “Gov. Murphy is leading the nation toward a cleaner energy future with one of the most ambitious offshore wind goals set to date.
“With today’s decision, BPU has made clear that in order to reach that 7,500 MW goal by 2035, the state must prioritize a planned transmission system that can scale the industry in an economic and environmentally sound way.”