New Jersey’s two U.S. senators are among five in the upper house of Congress proposing a series of tax credits meant to lure production to the United States for offshore wind components.
Formally called the Offshore Wind American Manufacturing Act, the congressional proposal calls for tax breaks up to 30% of the costs domestic manufacturers shell out for building components like the blades, towers, nacelles, foundations, gearboxes, generators and related equipment for offshore wind.
Businesses could apply for the full tax credits until the end of 2028, and the production tax credits until the end of 2030.
Environmentalists contend that offshore wind has a much smaller carbon footprint than fossil fuels and can stimulate economic activity wherever turbines are built. Critics however worry about the costs of construction and maintenance for offshore wind facilities–and whether those would be passed off to ratepayers.
Nonetheless, the prospect of offshore wind shows considerable promise both in New Jersey and nationwide.
A goal of President Joe Biden is for the nation to develop 30 gigawatts of offshore wind by 2030, while Gov. Phil Murphy’s goal calls for the state to have a 7.5 gigawatt capacity in offshore wind by 2035 and a statewide clean energy goal by 2050.
“As New Jersey has shown, investing in offshore wind projects has multiple benefits for our nation – from creating thousands of new jobs, to helping us in the fight against climate change,” reads a statement from U.S. Sen Cory Booker, a Democrat and one of the bill’s sponsors.
U.S. Sen. Robert Menendez, also a Democrat, is the other senator from the state supporting the measure.
Off (Jersey) shore wind
In 2019, the state approved a bid by Ørsted North America to develop a 1,100-megawatt offshore wind project several miles off the coast of Atlantic City. Called Ocean Wind, it’s expected to be completed by early 2025.
Then in June, state regulators approved Ørsted’s application for the 1,148-megawatt “Ocean Wind 2” project and the 1509-megawatt Atlantic Shores Offshore Wind, a joint venture between Shell New Energies US LLC and EDF Renewables, making it the nation’s largest offshore wind farm.
“We recognize the importance of expediting the establishment of a sustainable U.S.-based offshore wind supply chain that will not only enable clean energy production but will also boost the transition to domestic manufacturing and create good-paying jobs across the country,” reads an Aug. 12 statement from Ørsted Offshore North America Chief Executive Officer David Hardy.
The Ocean Wind project is still awaiting final approval from the Biden administration, which in May gave the green light for a 2,500-megawatt project off the coast of Martha’s Vineyard in Massachusetts.
Two ongoing business ventures supported by the Murphy administration could directly benefit from this tax credit, should it be enacted.
There’s the 200-acre “wind port” in Salem County, from which the state would ship out wind turbine components to the rest of the country including Ocean Wind 2; and the $250 million manufacturing facility for the wind turbines, based in Camden County along the Delaware River.