'Increased competition' | New Jersey issues separate offshore wind grid tender to contain costs
Lessons learned in SAA procurement convince regulator that special round will lead to ratepayer benefits
New Jersey regulator Board of Public Utilities (NJBPU) approved a measure to procure transmission infrastructure originally included in the ongoing round 3 as a separate solicitation due to cost concerns.
Bidders in the current round had been required to submit plans for onshore “prebuild [transmission] infrastructure (PBI)” in their proposals for up to 4GW of offshore wind generation.
The infrastructure includes duct banks and cable vaults for landing offshore wind power at the Sea Girt National Guard training centre and bringing it to the Larrabee power collector station 68 miles (109 km) north of Atlantic City.
“Installing these ducts and vaults as a single construction effort would minimise environmental and community impacts by resulting in a single shore crossing and a single or limited onshore corridor to the POI [point of interconnection],” said Jim Ferris, deputy director, at NJBPU’s division of clean energy.
The regulator’s review found that including the transmission infrastructure with generation, to be funded through offshore wind renewable energy credits (ORECs) as part of an awarded project, “represented an unreasonable burden for New Jersey's ratepayers”, said Ferris.
Staff determined that a separate solicitation for the PBI open to applicants prequalified by grid operator PJM “would increase competition and could lead to ratepayer savings”, according to the deputy director.
The PBI infrastructure package was originally included as option 1b in New Jersey’s landmark State Agreement Approach (SAA) transmission procurement, the first under PJM’s federally approved process that allows public policy goals to carry equal weight to reliability, need, and cost when planning upgrades.
The Larrabee solution fulfilled the SAA solicitation’s 1a proposal for upgrades to existing onshore infrastructure and is expected to save ratepayers $900m in grid-upgrade costs.
New Jersey's sector ambitions have been rocked by Orsted's surprise decision to cancel the 2.25GW Ocean Wind 1 & 2 arrays, leaving the state with only the 1.5GW Atlantic Shores project, challenging governor Phil Murphy's 11GW by 2040 target.
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