Lease costs for offshore wind firms at NJ facility unknown

Digital Brief: Jan. 12, 2023 (AM)

ATLANTIC CITY, N.J. (AP) — A second offshore wind firm agreed Wednesday to lease space in a state-built, taxpayer-financed staging facility for such projects, but how much either of them will pay remains unknown.

Democratic Gov. Phil Murphy announced that Atlantic Shores Offshore Wind LLC signed a letter of intent with the New Jersey Economic Development Authority to lease 35 acres of land at the New Jersey Wind Port.

That facility, located in Lower Alloways Creek Township in Salem County, will cost the state up to $500 million to build. It is designed to be an incubator for offshore wind projects, particularly in the fabrication and assembly stages, as New Jersey seeks to become the East Coast leader in offshore wind energy.

"New Jersey's leadership in offshore wind is on the rise, bringing with it significant catalytic investment, family-sustaining career opportunities, and the promise of a healthier environment for future generations," Murphy said at a business luncheon in Mount Laurel.

But what he did not say was how much Atlantic Shores would pay for the three-year lease, which has options for additional extensions.

Last April, the Danish wind developer Orsted signed a similar lease to become the first tenant at the port. The price of that lease also was not divulged.

Terence Kelly, an Atlantic Shores spokesperson, said Wednesday the letter of intent "kick-starts the lease negotiation" with the state.

An Orsted spokesperson could not immediately say how much the company's lease will cost. Virginia Pellerin, a spokesperson for the Economic Development Authority, said in an email that the Orsted agreement "is being finalized. No additional details right now."

When the first lease with Orsted was announced last April, authorities said the reason the lease amount was not made public at the time was because binding agreements were due to be submitted to the authority within two months.

Atlantic Shores CEO Joris Veldhoven said in a statement that "the location offers outstanding waterside access without barriers to transporting assembled turbines vertically and allows us to tap into New Jersey's highly skilled talent pool."

Thus far, New Jersey's Board of Public Utilities has approved three offshore wind energy projects: two by Orsted, and one by Atlantic Shores.

Those three projects combined aim to provide enough electricity to power over 1.6 million homes. New Jersey has set a goal of generating 100% of its energy from clean sources by 2050. The state plans to solicit additional wind energy projects every two years until at least 2028.

In February 2022, six companies bid a combined $4.37 billion for the right to build wind energy projects on the ocean floor off New Jersey and New York in the U.S. government's largest such auction in history.

The auction by the U.S. Bureau of Ocean Energy Management involved six tracts off New York and New Jersey in an area known as the New York Bight. When fully developed, these sites could provide enough energy to power 2 million homes, the agency said.

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