Going Once, Going Twice, Sold!: After Bidding, Off-Shore Wind Energy Areas Sold Off the Jersey Shore to Major Wind Companies
The Department of Interior completed its first ever auction of wind energy areas off the Jersey Shore this afternoon, awarding two wind energy areas representing 344,000 acres off the Jersey Shore for off-shore wind leasing to Res Americas and U.S. Wind Inc. The bidding resulted in 10 bids for the South Lease Area and 8 bids for the North Lease Area, according to the Bureau of Ocean Energy Management (BOEM) web-site. The final total sale price was nearly $2 million (U.S. Wind Incorporated paid just over $1 million for the North Lease Area, and Res Americas paid $880,000 for the South Lease Area). The South Lease Area consists of 160,480 acres and the North Lease Area consists of 183,353 acres.
While 13 companies initially qualified to bid in the lease for sale, only a handful ended up placing competitive bids. Today’s auction comes after last summer’s proposed notice of sale and an extensive public comment period and five years after the signing by Gov. Christie of the Off-Shore Wind Economic Development Act.
“Today’s auction shows there’s strong demand for off-shore wind in New Jersey, despite the delays of the Christie Administration,” said Doug O’Malley, director of Environment New Jersey. “Off-shore wind won’t be denied off the Jersey Shore, and the multiple bids shows off-shore wind companies are taking New Jersey seriously. Even with the Christie Administration’s inaction putting a damper on bids, the potential for off-shore wind is still a gold mine. It’s no longer a question if there will be off-shore wind in New Jersey – it is now a question of when.”
More than 1.5 million acres off the Atlantic Coast -- now including close to 344,000 acres off New Jersey’s waters which were successfully auctioned today -- have already been designated by state and federal officials for offshore wind power development and more are being considered. These areas could produce more than 16,000 megawatts – including more than 3,400 megawatts from New Jersey alone -- of virtually pollution-free electricity. These total areas of off-shore wind development could equal as much as 16 fossil-fuel burning power plants—making offshore wind an attractive option for states developing plans to shift to clean energy to achieve the targets in Clean Power Plan, recently finalized by the Environmental Protection Agency (EPA) this August.
The final notice of sale required that off-shore wind companies can’t bid and be awarded both lease areas, which led to the diversity of bids and the separate winners.
The proposed off-shore wind lease area, when fully developed, could power more than 1.2 million homes. The Wind Energy Area begins about seven nautical miles off the coast from Atlantic City (A map can be found here.) and extends 21 nautical miles off the Shore.
The Bureau of Ocean Management has already awarded nine commercial offshore wind leases, including seven through the competitive lease sale process (two in an area offshore Rhode Island-Massachusetts, another two offshore Massachusetts, two offshore Maryland and one offshore Virginia). These lease sales have generated about $14.5 million in winning bids for more than 700,000 acres in federal waters. This July, Deepwater Wind put steel in the water to officially begin the construction of the nation’s first off-shore wind mill of the coast of Rhode Island and near Block Island. The project will deliver 30 megawatts.
In August, more than 40 organizations, legislators, businesses, unions and local officials delivered a letter to Gov. Christie, urging him to make offshore wind power, which has vast potential in New Jersey, a key part of the state’s energy supply, on the 5 year anniversary of his signing the Off-Shore Wind Economic Development Act (OWEDA).
The legislation’s intent has languished at the Board of Public Utilities, missing deadlines that stretch into the years. During BPU President Rick Mroz’s confirmation hearing in the Senate Judiciary committee this July, he committed the BPU to hiring a consultant to help aid on finalizing the much-delayed BPU off-shore wind rules.
“Governor Christie signed a bill five years ago greenlighting off-shore wind off the Jersey Shore. Today’s auction is the best news for off-shore wind in New Jersey since then,” O’Malley said. “New Jersey has turned from a leader to a laggard on off-shore wind, and we’re still waiting for off-shore wind rules from the Board of Public Utilities. Our clean energy future is blowing in the wind, and we need to harness it. We’re thankful the Department of Interior held today’s auction and for the frenzy of interest from off-shore wind companies, but the BPU still needs to deliver.”
Environment New Jersey is a citizen based state-wide environmental advocacy organization representing more than 20,000 citizen members across New Jersey, and is based in New Brunswick and Trenton.