With the backdrop of the recently completed state budget process and a sustained push by opponents to slow the process down, the offshore wind sector here in the Garden State took a major step forward this month when Ocean Wind 1, New Jersey’s first such project, received an important federal approval and moved closer to commencing construction.
The Interior Department’s Bureau of Ocean Energy Management announced it approved the plan for construction and operations of the project, being developed by Ørsted about 13 miles off the coast of Atlantic City. The move marks a major milestone for the project, which is estimated to have a capacity of 1,100 megawatts, powering up to 500,000 homes when it begins commercial operations in 2025, while creating thousands of jobs.
The federal action sets the stage for Ocean Wind 1 to move from the development and permitting phase to the construction phase, with onshore construction activities beginning this fall, including the project’s onshore underground transmission line and onshore substations. Offshore construction is slated to ramp up in 2024, including installation of the monopile foundations and GE Haliade-X wind turbines. The decision allows Ocean Wind LLC’s plan to construct up to 98 wind turbines and up to three offshore substations within its lease area.
Ocean Wind 1 is a major component of Gov. Phil Murphy’s lofty clean energy goals.
“The announcement of Ocean Wind 1’s Record of Decision represents a pivotal inflection point not just for Ørsted, but for New Jersey’s nation-leading offshore wind industry as a whole,” Murphy said. “By preparing to begin onshore construction this fall, Ocean Wind 1 will help bring New Jersey one crucial step closer to achieving a 100% clean energy economy by 2035 and 11,000 MW of offshore wind power by 2040. Just as importantly, as we continue to cultivate burgeoning new industries while confronting the worsening climate crisis, our state’s first offshore wind project will generate thousands of good-paying union jobs and considerable environmental benefits for generations to come.”
“Ocean Wind 1 is on the cusp of making history as construction on New Jersey’s first offshore wind farm is set to begin in a few short months, delivering on the promise of good-paying jobs, local investment and clean energy,” said David Hardy, group executive vice president and CEO Americas at Ørsted.
“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 1 project is another milestone in our efforts to create good-paying union jobs while combatting climate change and powering our nation,” said Interior Secretary Deb Haaland. “By working closely with state and local leaders, Tribes, ocean users, and other stakeholders, we are moving forward with responsible clean energy development that will benefit communities, while also mitigating potential impacts on the environment or marine life.”
“Ocean Wind 1 represents another significant step forward for the offshore wind industry in the United States,” said BOEM Director Elizabeth Klein. “The project’s approval demonstrates the federal government’s commitment to developing clean energy and fighting climate change and is a testament to the State of New Jersey’s leadership in supporting sustainable sources of energy and economic development for coastal communities.”
Federal officials note that the agency’s decision documents the extensive range of monitoring and mitigation measures that Ocean Wind will undertake to reduce the potential impacts to protect species, such as marine mammals, sea turtles and Atlantic sturgeon. The measures include vessel speed restrictions and clearance zones during construction. Ocean Wind has also committed to three fisheries mitigation programs, including a direct compensation program for reimbursement of lost revenues, a navigational safety fund for equipment upgrades, and a reimbursement program for lost or damaged commercial fishing gear. BOEM says it worked with Tribes, federal, state, and local government agencies in addition to reviewing comments provided by industry, ocean users, and other key partners and stakeholders to develop these measures.
BOEM added that it considered the information obtained through a series of meetings and an extensive public comment period to develop the final Environmental Impact Statement, a critical step to ensure the project can move forward while balancing the needs and interests of everyone who may be affected by the development.
Ørsted said that since 2019, Ocean Wind 1 has worked diligently to move through the state and federal review process, marking the first Record of Decision for a project whose review started under the Biden Administration. Ørsted added that the issuance of the ROD precedes the anticipated approval of Ocean Wind 1’s Construction and Operations Plan in September. The COP outlines the detailed construction, operation and maintenance activities of a wind farm, including the responsible decommissioning at end of life, potential impacts, actions and design alternatives, and proposed measures to avoid, minimize, and mitigate potential impacts from the project.
Up to this point, the story sounds positive, but uncertainty persists. A rash of marine mammal deaths over the last year up and down the coast has increased tensions, with a combination of Republican lawmakers at the federal, state and local levels; community activists and organizations; and other stakeholders, calling for a pause in the action until more is learned about whether the early activity has caused these deaths.
So far, the federal agencies that oversee such matters like BOEM and the National Oceanic and Atmospheric Administration have disputed any link between the deaths and offshore wind activities, which currently entails ocean floor mapping using sonar technology, something opponents point to as a possible cause of disorientation for the dying mammals.
“To date, no whale mortality has been attributed to offshore wind activities,” a BOEM spokesperson told NJBIZ in May. “The offshore wind industry typically uses high-resolution geophysical (HRG) surveys to map the seafloor and assist with their siting efforts. BOEM and NOAA Fisheries rigorously assessed the potential effects of HRG surveys associated with offshore wind development in the Atlantic, and the agencies concluded that these types of surveys are not likely to injure whales or other endangered species.”
“At this point, there is no evidence to support speculation that noise resulting from offshore wind characterization surveys could potentially cause mortality of whales,” a NOAA Fisheries spokesperson told NJBIZ in May. “We will continue to gather data to help us determine the cause of death for these mortality events.”
Amid those growing calls for a pause, Murphy has continued to point to those federal agencies finding no correlation between offshore wind activity and the surge in marine deaths.
“Gov. Murphy has been abundantly clear: the Murphy Administration takes very seriously every potential threat to New Jersey’s treasured marine ecosystems and mammals, and we will always ground our policy decisions in the most up-to-date science and evidence,” a Murphy spokesperson told NJBIZ in May. “But the notion that either this administration or its federal counterparts have not adequately investigated tragic whale deaths is categorically false. Scientific experts at the NJDEP [New Jersey Department of Environmental Protection] and NJBPU [New Jersey Board of Public Utilities] are working in close coordination with NOAA and other federal partners, who have been monitoring and studying this phenomenon for more than half a decade. The results of their investigations have been unanimous and unmistakable: at this time, there is no evidence of specific links between whale mortalities and ongoing surveys for offshore wind development. In the absence of such evidence, the Murphy Administration will continue to responsibly pursue its offshore wind development goals amid the urgent climate crisis.”
But opponents have kept up the pressure, which has included hearings, letters to federal officials, rallies, social media campaigns, and more.
Last month, the Government Accountability Office – the independent congressional watchdog – officially agreed to launch an investigation into the impacts of the state’s offshore wind development on the environment, the fishing industry, military operations, navigational safety, and more, which was requested by a group of congressmen, including two from New Jersey: Rep. Chris Smith, R-4th District and Rep. Jeff Van Drew, R-2nd District.
“This aggressive, independent investigation into the ocean-altering impacts of the 3,400 offshore wind turbines slated for the Jersey Shore will help address the wide-ranging questions and concerns that the Biden Administration and Gov. Murphy continue to dismiss as they plow full steam ahead with this unprecedented offshore wind industrialization of our shore,” said Smith. “It is absolutely critical that New Jersey residents understand all the impacts of these offshore wind projects – which will permanently transform our marine environment and seascape and could put our tourism-driven economy at grave risk – before it’s too late.”
“We’ve had a unified block of Republican legislators and congressmen from the Jersey Shore calling for an investigation into the surge of whale deaths that’s been occurring since last year when the wind farm surveys began,” said Sen. Vince Polistina, R-2nd District. “As we’ve said previously, we believe the work that’s currently being conducted in our waters by the wind developers should be suspended until the GAO can tell us if there’s a link or not to the deaths of dozens of marine mammals.”
The drama intensified as budget process came down the stretch when legislation (Assembly Bill 5651/Senate Bill 4019) that would allow Ørsted to keep federal tax credits instead of going to ratepayers was narrowly passed by the Legislature, along party lines, during marathon voting sessions.
Opponents of offshore wind blasted the measure, which was signed into law earlier this month by Murphy during a signing ceremony at the Paulsboro Marine Terminal — the first monopile fabrication facility in the U.S., where the monopiles windmills for Ocean Wind 1 are being welded, sandblasted, and painted at the EEW American Offshore Structures’ facility.
“The hardworking people of New Jersey deserve better than Trenton’s plan to bail out foreign offshore wind corporation Ørsted and give away billions of federal tax credits intended for ratepayers,” said Smith. “It is abundantly clear that New Jersey’s massive industrialized offshore wind projects will not only have tremendous environmental, navigational, economic and national security implications, but also require an endless stream of U.S. taxpayer subsidies to try to keep these foreign-run projects afloat.”
And while that kind of rhetoric is not surprising from opponents of offshore wind, there was also some criticism for the bill from an unexpected source: Atlantic Shores Offshore Wind, the company approved to build the state’s third and biggest offshore wind farm, Atlantic Shores Project 1.
“Today’s bill passage reaffirms the state’s commitment to offshore wind. Yet, to establish a durable, thriving, full-scale offshore wind industry in New Jersey, we need an industry-wide solution, one that stabilizes all current projects including Atlantic Shore Project 1,” the company said in a statement. “Tens of thousands of real, well-paid and unionized jobs are at risk. Hundreds of millions in infrastructure investments will be foregone without a path forward. And while the current bill provides uplift for our manufacturing partner EEW-AOS at the Port of Paulsboro, and we remain confident that EEW-AOS will be prepared to start manufacturing monopiles for Atlantic Shores Project 1, we need immediate action that also supports the Atlantic Shores Project 1 to keep these commitments within reach.”
Despite all of that, the bill was signed into law by Murphy, along with two others (S3748/A5393 and S4023/A5644), as part of a package he said was designed to catalyze job creation while supporting burgeoning sectors.
“When future generations look back on this pivotal moment in our state’s history, we will be judged not only by our long-term economic vision for the Next New Jersey, but by the concrete steps we took to create good-paying jobs for workers here and now,” Murphy said. “The future of tomorrow’s industries begins today, and with it the promises of an inclusive 21st-century economy founded upon family-sustaining union jobs and continued growth in emerging sectors.”
“Under Gov. Murphy’s leadership, New Jersey has made major investments to build and attract new, diverse, and innovative sectors to help create a stronger, more resilient economy,” said New Jersey Economic Development Authority CEO Tim Sullivan. “With the stroke of a pen today, Gov. Murphy is reaffirming his commitment to creating good-paying jobs, revitalizing communities, and improving New Jersey’s environment.”
“Today, New Jersey takes a major step toward reaching the governor’s goal of 11 GW of offshore wind capacity by 2040 so that we can provide clean, renewable energy for all New Jerseyans as we continue to fight the ravages of climate change,” said NJBPU President Joseph Fiordaliso.
“There is endless potential for creating good, family-wage jobs with clean energy projects in New Jersey. We have the greatest workforce in America,” said Sen. Bob Smith, D-17th District, chairman of the Senate Environment Committee, and a prime bill sponsor. “With this law, we are sending a strong message to those employers who want to invest in New Jersey that we are committed to being a leader in offshore wind and the global clean energy economy.”
“Offshore wind is a once-in-a-generation environmental and economic opportunity for our state,” said Assembly Majority Leader Lou Greenwald, D-6th District, a prime sponsor.
“It is appropriate that Gov. Murphy chose to sign the tax credit bill at the EEW AOS plant in Paulsboro because investments like this ensure that offshore wind farms up and down the Atlantic Seaboard will be built with components manufactured by New Jersey workers and shipped out of New Jersey ports,” said former Senate President Steve Sweeney, who chairs the advisory board for the Sweeney Center for Public Policy at Rowan University and sponsored the state’s first offshore wind tax credit law as senate president in 2010. “Both the administration and the Legislature worked hard over the past five years to put New Jersey in the forefront of offshore wind manufacturing, supply chains and development. This legislation preserves our edge in the increasing competition with New York, Maryland, and other states for offshore wind jobs.”
That sentiment was echoed by former state senator and NJBPU Commissioner Bob Gordon, who told NJBIZ that policymakers need to recognize that the world is embracing offshore wind and that turbines are coming to America.
“Gov. Murphy’s decision to allow Ørsted’s Ocean Wind 1 project to make greater use of federal tax credits is critical to the future of offshore wind in New Jersey because we need to maintain our competitive edge over surrounding states,” Gordon explained. “New York, Maryland and other nearby states are aggressively advancing their own programs, and all allow full access to the federal investment tax credits. Right now, New Jersey is viewed as being the leader in the Mid-Atlantic, but unless we maintain tax parity with our neighbors, thousands of new jobs and billions of dollars in new investment will simply go elsewhere. In my view, the policy should be extended to the other projects in the pipeline.”
The legislation was also applauded by a number of labor and business leaders around the Garden State.
“The signing of these economic growth bills, which were supported by the New Jersey Chamber of Commerce, sends a message to the rest of the country that New Jersey’s leaders are supportive of burgeoning industries such as offshore wind, and will work with companies seeking to create jobs and facilities benefitting our economy and residents,” said Tom Bracken, New Jersey Chamber of Commerce president.
“Our more than 7,000 members across the Garden State look forward to building the projects that will serve as the foundation of New Jersey’s growing economy,” said Greg Lalevee, business manager, International Union of Operating Engineers Local 825.
And supporters of the legislation also note that the bill requires Ørsted to put up $200 million for EEW AOS and other wind manufacturing facilities in Gloucester and Salem counties as a condition for use of the federal tax credits.
Despite all of this, offshore wind critics stand firm in their opposition to the legislation and maintain a call to pause until more is learned about the emerging sector.
“Democrats like Gov. Murphy who often complain about corporate welfare had absolutely no problem giving $1 billion to a foreign wind farm developer at the expense of New Jersey ratepayers,” said Sen. Michael Testa, R-1st District, in a statement after the legislation was signed. “Other wind farm developers are already lining up at the trough of big government begging for their own bailouts, which Gov. Murphy is likely to give them. It’s more proof that wind power doesn’t make economic sense without massive government subsidies.”