New Jersey board declines to award new wind energy contracts

Part of the project, Atlantic Shores 1, retains a contract from 2021 with the Board of Public Utilities to develop enough offshore wind energy to power over 700,000 homes. But now, the project is unlikely to start construction in 2025 as initially planned, said Head of External Affairs Terence Kelly.

“This really does stall things,” Kelly said.

Without a power purchase agreement, a wind project cannot move forward to construction, Ohleth said.

“Until you actually have a customer — the customer being the state, the state buying the power through the procurement process — there is no project,” she said. “It is singularly the most important thing for a developer to have.”

Atlantic Shores could potentially look for other buyers, such as other states, Ohleth said.

The canceled solicitation is just the “latest string in a series of bad news for New Jersey’s efforts to deploy offshore wind off its coasts,” said Tim Fox, an industry analyst at Clearview Energy Partners.

In 2023, Danish wind developer Ørsted withdrew from two projects planned off the shore of Atlantic City, which had won awards during earlier state solicitations. The company cited supply chain issues, inflation and rising interest rates.

Then last year, Leading Light Wind, a project planned off the coast of Long Beach Island that had won a different award from the state, asked the Board of Public Utilities for a pause on its plan, due to problems sourcing turbine blades. The developer asked for another delay in January.

“New Jersey first set a target for offshore wind back in 2018,” Fox said. “As of yet, it’s unclear if a single project will move forward.”

In a statement, Gov. Phil Murphy said he supported the Board of Public Utilities’ decision.

“Developing the offshore wind industry in New Jersey is a once-in-a-generation opportunity to create tens of thousands of jobs, drive an entirely new manufacturing supply chain, and secure energy independence,” he said. “This is especially critical during a time when new energy generation is needed to provide our residents and business with reliable, cost-effective energy solutions. However, the offshore wind industry is currently facing significant challenges, and now is the time for patience and prudence.”