New Jersey sweetens pot in bid to become 'American capital of offshore wind'
Frontrunning state in the emerging US offshore wind market takes next steps toward securing major slice of the supply chain development pie on the Atlantic seaboard
The US state of New Jersey is targeting tier-1 offshore wind manufacturers with generous tax breaks as it jockeys to position itself as the “American capital” of the fast-emerging regional industrial play.
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The state government said it would provide credits of up to 60% of the investment value for new-build supply chain infrastructure including factory projects on the condition of a minimum $50m buy-in and creation of at least 300 new, full-time jobs .
The two-year-old Offshore Wind Tax Credit (OWTC) programme – revived under the New Jersey Economic Recovery Act Covid-relief package passed last December and more than tripled in value to $350m – began accepting applications on Monday (5 December). The tax credits could be applied against corporate business tax or insurance premiums of any investor.
“The OWTC is a powerful financial tool that will [enable] global offshore wind companies to make the decision to locate, invest, hire and, most importantly, build a local supply chain here in New Jersey, ”said Tim Sullivan, CEO of the New Jersey Economic Development Authority (NYEDA), the state agency tasked with implementing economic policy and law, in a statement.
“The Garden State is quickly emerging as the American capital of offshore wind,” he added.
To qualify for the OWTC program, investments must pass an economic impact assessment demonstrating that they will generate returns of 110% of their value within a five-year time period. The program criteria allows for a phased-in approach of at least 150 new jobs created by the second year, and 300 total new jobs by year four. The net-benefit period can also be extended to up to 20 years if applicants can present verifiable evidence of a longer commitment to the state.
The OWTC scheme was originally introduced in 2019 as part of Murphy’s energy ‘master plan’ but had no takers.
“We had some great conversations around it, but it was still too early for the industry and none of the companies were willing to commit at that time,” Sabina said.
Recent industry momentum, fuelled by the US Biden administration's ambitious 30GW of offshore wind by 2030 target as well as New Jersey’s own support, have changed that dynamic. The program was revised in the interim based on feedback from prospective investors.
The OWTC now allows for a phased-in approach to jobs creation and extends throughout the state, in contrast to its original restriction to capex investments in New Jersey's underdeveloped south. Sabina said the revised program has attracted interest but demurred in naming companies or industries.
GE Renewables, Siemens Gamesa Renewable Energy, and Vestas North America, have all submitted bids for manufacturing space at the Wind Port. Vestas has preferred supplier status for its new 15MW turbine with Atlantic Shores, while GE Renewables is in the frame for the two Ocean Wind projects for its 14MW Haliade-X turbines.