New Jersey selects Denmark's Orsted for major offshore wind project

FILE PHOTO: A support vessel is seen next to a wind turbine at the Walney Extension offshore wind farm operated by Orsted off the coast of Blackpool, Britain September 5, 2018. REUTERS/Phil Noble/File Photo

(Reuters) - New Jersey on Friday selected Denmark’s Orsted A/S to develop a 1,100-megawatt wind project off the coast of Atlantic City, the largest ever offshore wind procurement by a U.S. state.

Orsted’s proposal received unanimous approval at a meeting of the five-member New Jersey Board of Public Utilities (BPU), which was tasked with evaluating the proposals. The panel had also considered applications from Norway’s Equinor and a joint venture between EDF Renewables North America and Shell New Energies US LLC.

The selection of Orsted continues the trend of European companies dominating the nascent U.S. offshore wind space. New Jersey officials cited the company’s experience developing offshore wind projects in Europe as one reason for choosing Orsted, which bought U.S. offshore wind developer Deepwater Wind last year.

“New Jersey is going to finally be open for business as far as offshore wind is concerned,” BPU President Joseph Fiordaliso said before the vote.

The solicitation, which board members described as historic, marks the first step toward New Jersey’s goal of contracting 3.5 GW of offshore wind by 2030. Under Governor Phil Murphy, the state has pledged to eliminate carbon from its power sector by 2050.

The project, called Ocean Wind, is expected to be completed in 2024, Orsted said in a statement. New Jersey utility Public Service Enterprise Group has an option to become an equity investor in the project, Orsted said.

Ocean Wind is expected to generate enough electricity to power 500,000 New Jersey homes. It will also generate $1.17 billion in economic benefits and create 15,000 jobs, Fiordaliso said. New Jersey’s BPU estimated that the project would add $1.46 to residential customers’ monthly bills.

The cost of generating electricity from offshore wind farms has dropped dramatically in recent years but is far more costly than power from wind facilities onshore. The United States currently has just one small offshore wind farm off the coast of Rhode Island that is also owned by Orsted, but larger projects are being developed both there and elsewhere in the Northeast.

Other Orsted offshore wind projects under development will deliver power to New York, Maryland, Rhode Island and Connecticut.

Reporting by Nichola Grooml; editing by Jonathan Oatis