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Report Shows New Jersey #1 in Off-Shore Wind Potential & Poised To Benefit Most from Federal Tax Credit Extension

For Release

Trenton – New Jersey may have lost the race to build the first off-shore wind facility in the nation, but the potential for off-shore wind power production is still highest off the Jersey Shore, according to Turning to the Wind, a new Environment New Jersey Research and Policy Center report. The report also shows that carbon pollution equal to 1.1 million cars could be eliminated by 2020 with a rapid expansion in wind power off the Jersey Shore.

Using data from the National Renewable Energy Laboratory, the report shows that as much as 1,700 MW of wind power could be built in the state in the next 5 years with the right policies in place, enough to power more than half a million homes and eliminate more than 5 million metric tons of carbon pollution. The current expansion of off-shore wind has been stymied by the Christie Administration’s BPU, which has consistently failed to move forward on off-shore wind since Gov. Christie signed legislation in 2010.

“Off-shore wind’s potential off the Jersey Shore is still incredibly strong. We have one of the worst potential for on-shore wind, but the promise off-shore of Atlantic City remains an untapped jackpot,” said Doug O’Malley, director of Environment New Jersey.  “The BPU continues to cast aspersions on off-shore wind, but the Christie Administration shouldn’t continue to ignore this resource.”

The report release comes on the heels of lame duck legislation action on legislation to require the BPU to provide a 30-day window for applications for an off-shore wind project off Atlantic City. The legislation (S2711/A4128) passed the Assembly by a 48-21 vote on December 17 and will likely receive a vote in the State Senate before the end of the session on January 11. The bill would directly benefit Fishermens’ Energy, a Cape May County-based company that has proposed a 25MW project off Atlantic City.

“New Jersey can and should be a leader in offshore wind energy, but we can’t drag our feet any longer. We strongly urge the Governor to sign this bill into law so we can invest in renewable energy and grow our economy,” said Senator Jim Whelan (D-2), a prime sponsor of the legislation.

Both the Legislature and the governor approved a plan for the state’s first major offshore wind farm in 2010. The Fishermen’s Energy’s long-delayed project, would construct 25-megawatt wind farm three miles off Atlantic City, could generate more than 500 jobs to the area, already received a $47 million Department of Energy grant and could be constructed in only two years.

 “New Jersey has the potential to be a national leader in wind energy, starting right here in Atlantic City. Creating jobs so we can green our economy and our environment should be a priority. Now is the time for the Governor to put politics aside and keep the promises he made in 2010 when he signed the Offshore Wind Act,” said Assemblyman Vince Mazzeo (D-2), a prime sponsor of the legislation.

The report, Turning to the Wind, comes as the Christie Administration, like many states with Republican governors, is actively suing the Obama Administration over the Clean Power Plan, the centerpiece of President Obama’s Climate Action that sets state-by-state limits on carbon pollution from power plants and encourages clean energy development and attempting to determine how to comply with the carbon reductions required for New Jersey.

Regardless of the Clean Power Plan, off-shore wind is a key component to meeting the state’s renewable portfolio standard requirement of generating 22.5% renewable energy by 2021. The BPU has consistently delayed implementing an Off-Shore Wind Renewable Energy Credit program and the latest update to the state Energy Master Plan downplayed the importance of off-shore wind in meeting New Jersey’s renewable energy benchmarks.

In November, the Bureau of Ocean Energy Management (BOEM) successfully auctioned off the two wind energy areas off the Jersey Shore totaling 344,000 acres. The off-shore wind leases were awarded to Res Americas and U.S. Wind Inc. and the final total sale price was nearly $2 million. The wind energy area begins about seven nautical miles off the coast from Atlantic City (shown here) and extend 21 nautical miles off the Shore.

The omnibus budget bill which passed Congress and signed into law by President Obama right before Christmas included an unexpected boon for the clean energy industry, with the five-year extension of a key clean energy tax credit for the wind industry, the production tax credit (PTC), as well as the investment tax credit (ITC). The PTC expired at the end of 2014, and now will be extended through the end of 2020. The ITC was slated to expire at the end of 2016, and will now be extended through 2022.

New Jersey stands to benefit the most out of any Atlantic Coast state from the extension of the PTC and the report estimates that New Jersey would see the 7th highest increase in wind in the country because of the tax credit’s extension. Using Department of Energy modeling, the upper scale of New Jersey’s wind capacity could reach more than 1,950 megawatts of energy by 2020.

“The five-year extension of tax credits for clean energy like wind power will be a welcome change for the renewable energy industry which has been hurt by uncertainty,” said O’Malley.  “The potential for offshore wind in New Jersey just got a big boost, but the five-year timeline means that endless delays can’t continue.”

The important of off-shore wind for New Jersey was reinforced by the report’s findings on New Jersey’s wind power production in 2014, which of the state’s with available data, was ahead of only Delaware and Rhode Island. New Jersey only produced 22,855 megawatt hours of wind power in 2014, which powered a little over 2,000 homes across the state. Because of New Jersey’s population density and wind patterns, the only viable location for commercial scale off-shore wind will be off the Jersey Shore.

“To avoid the worst impacts of global warming, we need to transition to 100 percent clean, renewable energy,” said O’Malley. “We need to do everything we can to develop abundant, pollution-free wind power off the Jersey Shore.”

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Environmental Impacts of U.S. Offshore Wind Energy Development in 2020

 

State[i]

Estimated Offshore Wind Energy Added by 2020 (Megawatts)[ii]

Estimated Wind Energy Generation in 2020

(Megawatt hours)[iii]

Equivalent  Homes Powered for year[iv]

Estimated Carbon Dioxide Averted in 2020

(Metric tons)[v]

Equivalent Number of Cars Removed from Road for year[vi]

Equivalent Number of Coal Plants Shut Down for year[vii]

Maryland

500

1,883,400

172,283

1,552,518

326,846

0.41

Rhode Island/ Massachusetts

1,000

3,766,800

344,566

1,824,460

384,097

0.48

Massachusetts

400

1,506,720

137,827

717,759

151,107

0.19

New Jersey[viii]

1,700

6,403,560

585,763

5,217,830

1,098,491

1.37

Total

3,600

13,560,480

1,240,439

9,312,568

1,960,541

2.45


[i] In our calculations, we included offshore wind projects that have been issued leases for offshore wind energy development by the U.S. Department of the Interior’s Bureau of Ocean Energy Management that are on track to begin commercial operations by 2020.

[ii] Aaron Smith, Tyler Stehly, and Walter Musial, National Renewable Energy Laboratory, 2014–2015 Offshore Wind Technologies Market Report, September 2015.

[iii] To convert wind energy capacity (MW) into projected wind energy generation, we applied a capacity factor of 0.43, the average capacity factor listed for European offshore wind facilities with commercial operation dates between 2011 and 2017 in Figure 22 of Aaron Smith, Tyler Stehly, and Walter Musial, National Renewable Energy Laboratory, 2014–2015 Offshore Wind Technologies Market Report, September 2015.

[iv] We divided our estimated offshore wind electricity generation figure by the 2014 average annual electricity consumption for a U.S. residential utility customer of 10,932 kilowatt hours (see Energy Information Administration, Frequently Asked Questions, available at www.eia.gov/tools/faqs/faq.cfm?id=97&t=3). This estimate may be inaccurate if average household electricity consumption in 2020 differs dramatically from average residential electricity use in 2014.

[v] To estimate the amount of carbon dioxide averted in 2020 by developing the offshore wind projects listed above, we applied regional emission factors for 2020 to each state.  See the “Methodology” section of the main report for details.

[vi] This estimate reflects the number of passenger vehicles we would expect to produce carbon dioxide emissions equivalent to the amount of carbon dioxide averted by the development of listed offshore wind projects in 2020.  For this calculation, we assumed that each car emits 4.75 metric tons of carbon dioxide per year, as estimated by the U.S. EPA’s Greenhouse Gas Equivalency Calculator, described at www2.epa.gov/energy/ghg-equivalencies-calculator-calculations-and-references#vehicles.  This will be an underestimate to the extent that average passenger vehicle fuel economy improves from 2011 levels by 2020.

[vii] The U.S. EPA estimates that the average U.S. coal-fired power plant emits 3,808,651 metric tons of carbon dioxide per year (available at www2.epa.gov/energy/ghg-equivalencies-calculator-calculations-and-references).  We therefore divided our estimates for averted emissions in 2020 by 3,808,651 to estimate the amount of coal-fired power plants that would need to cease operations to achieve equivalent emissions reductions.

[viii] We divided New Jersey’s estimated offshore wind potential energy capacity by half, from 3,400 MW to 1,700 MW because the actual offshore wind capacity announced by project owners once sites are fully evaluated is often about half of the maximum potential capacity estimated when the lease is first awarded.