Wind

New Jersey taking 'long term view' of $638m wind port that lost Orsted as its first tenant

State set to reopen leasing at US' largest coastal facility to fill gap left by cancellation of 2.25GW Ocean Wind 1 & 2

New Jersey Wind Port under construction.
New Jersey Wind Port under construction.Foto: Recharge

New Jersey Wind Port (NJWP), the nation’s first harbour facility purpose-built for offshore wind, is throttling down construction of its first phase following the surprise cancellation of Orsted’s Ocean Wind 1 project.

Orsted last month cancelled the project as well as the 1.15GW Ocean Wind 2 due to macroeconomic headwinds despite obtaining approval by offshore energy regulator Bureau of Ocean Energy management (BOEM), one of only five fully permitted US arrays.

Construction of the port's 30-acre (12-ha) phase 1 marshalling capacity is already 90% complete, according to its owner, New Jersey Economic Development Authority (NJEDA), under an accelerated construction schedule to meet Orsted’s previous timeline.

Orsted's contract was to have commenced in April next year and to run for the duration of its two-year offshore installation.

Full completion of phase 1 “will now occur in mid-2024 in order to derive savings through avoided acceleration,” said Jonathan Kennedy, NJEDA vice president for infrastructure and managing director for the wind port.

Ocean Wind 2 was likewise to be marshalled from the NJWP starting in 2027 before it was cancelled.

The 1.5GW Atlantic Shores array under development by Shell-EDF, meanwhile, remains “committed to marshal from the Port for its first project, with an expected lease start of 2026,” said Kennedy.

The agency will shortly be commencing a notice to lease process to bridge the gap left by Ocean Wind 1, NJEDA confirmed.

“Given the much-publicized shortage of fit-for-purpose port capacity along the east coast, NJEDA is hopeful that the port has utility for other east coast projects during the period 2024 to 2026,” Kennedy told Recharge.
The US industry needs to plug a $36bn gap in port infrastructure investment to reach the increasingly unlikely goals of President Joe Biden's administration for 30GW by 2030 and 110GW by 2050.

The port project broke ground in September 2021 as the key infrastructure investment by the state to support its 7.5GW target, later expanded to 11GW.

When both phases of the port are completed in 2026, it will cover over 200 acres – the largest in the US – and feature two staging quays as well as major nacelle assembly and other component manufacturing space, with turbine OEMs GE, Siemens Gamesa, and Vestas having all submitted bids for capacity.

The agency is “building the port with a long-term view of demand but is also taking near-term market dynamics into account when determining the timing for future phases,” Kennedy said.

New Jersey continues to press forward with its round 3 solicitation for another 4GW of capacity still open and has approved vast sums for port and supply chain infrastructure, including a landmark $1.08bn offshore wind transmission upgrade.

New York awarded another 4.5GW of capacity in its round 3 tender, while three New England states – Connecticut, Massachusetts and Rhode Island – are collaborating to procure 6.4GW of new capacity.

All of this new capacity will likely be interested in using American made components to obtain 10% investment tax credit for domestic content included in landmark Inflation Reduction Act.

“NJEDA is confident that future offshore wind projects will bring additional manufacturing demand to the port,” said Kennedy, confirming the agency is in discussions with several parties interested in developing manufacturing at the port.

“The Port will have a useful life of 50 years – though with diligent asset maintenance the asset’s life is infinite,” said Kennedy.

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Published 13 November 2023, 22:32Updated 13 November 2023, 22:35
AmericasUSNJEDANew Jersey Wind PortOrsted