The state hopes to eventually generate 1,100 megawatts of wind power through four offshore wind farm projects, including two proposed by Cape May-based Fishermen’s Energy. Two other companies – NRG Bluewater Wind and Garden State Offshore Energy – are planning similar projects between Atlantic City and Avalon that are estimated to cost more than $1 billion each.
But the road ahead is uncertain and fraught with government red tape, insecure financing and potential environmental liabilities, conference attendees explained.
"Offshore wind turbines from a European perspective is not new and has a clear risk profile," said Thomas Zimmerman, a German banker who was one of many financiers attending the conference. "Well, we don’t have the same hurricane risk."
Lt. Gov. Kim Guadagno took the opportunity Thursday to sell New Jersey to the assembly of bankers, insurance companies and wind-industry executives. She pointed out that New Jersey has a skilled workforce, 60 higher-education institutions, $100 million in available tax credits and an artificial market for wind power in a densely populated region that has some of the nation’s highest energy prices.
"New Jersey has the best overall climate to develop your business here. We have the political will to get you here on time and under budget," she said.
To show her sincerity, Guadagno offered her personal cell-phone number to companies that are considering the Garden State.
Three companies are not waiting.
Garden State Offshore Energy, owned by PSEG and Deepwater Wind, plans to launch a buoy this year using radar called LIDAR to study weather patterns 20 miles off Atlantic City.
Company spokesman Scott Jennings said state regulations creating a market for 1,100 megawatts of wind power will open doors to offshore wind companies.
"The state is positioning itself very well to attract manufacturing businesses," he said. "What gives New Jersey a leg up is the size and certainty of the program. No state has a program that large."
The state Department of Environmental Protection finished a two-year study of 73 miles of coastline looking at the migratory patterns of birds, whales, dolphins and sea turtles in preparation for the offshore wind projects.
"The state has invested substantial resources to get this started," Jennings said.
When it comes to on-shore wind potential, New Jersey does not even make the top-20 states, according to the American Wind Energy Association. But the state’s offshore wind potential is vast: an estimated 100 gigawatts within 50 miles of shoreline.
Critics of offshore wind say it will lead to higher utility bills for customers. But New Jersey has not seen anything resembling the public backlash that faced Massachusetts-based Cape Wind, which this week secured the nation’s first federal lease for offshore wind from the U.S. Department of the Interior.
By comparison, New Jersey’s only commercial wind farm – the five windmills at the Atlantic County Utilities Authority off Route 30 in Atlantic City – has been well received, so much so that the authority regularly offers private tours. The authority ferried visiting conference attendees from the convention center to its headquarters to see its windmills.
And the project manager for the wind farm, ACUA Vice President Paul Gallagher, is now working for Fishermen’s Energy and served as the local host for this week’s wind conference.
State environmentalists are solidly behind offshore wind, even criticizing the lengthy delays these projects face in permitting that postponed Cape Wind’s project off Cape Cod by eight years.
"It took too long and was too complex a process."said Jeff Tittel, director of the New Jersey chapter of the Sierra Club. "It is still easier to put an oil well off our coast than a windmill. It takes 10 years to put up a wind farm and two years for an oil well."
Fishermen’s Energy’s strategy is to build a $175 million, six-turbine demonstration project 2.8 miles off Tennessee Avenue in Atlantic City to show that offshore wind can be practical and lucrative.
President Daniel Cohen said the company has a contract with Lockheed Martin for an offshore-wind study that uses innovative technology more often associated with jet aircraft.
His company is collaborating with the owners of the Steel Pier on the city’s Boardwalk to study bird migration. The Steel Pier plans to erect five 200-foot wind turbines on its landmark next year.
Fishermen’s Energy hired Geo-Marine to study bird migration using a radar system mounted at the end of the pier. The radar tracks birds 3 miles out and as much as 18,000 feet high. It also uses a thermal device to identify the species of birds.
And the company is using a barge platform to study the ocean floor where it intends to run a power cable between the six windmills to an underground conduit beneath the beach and Boardwalk to a junction box.
Cohen said he expects to win all necessary permits by year’s end and begin construction in 2011. "We hope to be in the water soon," he said.
Offshore wind could power New Jersey, environmental group says
Offshore wind could provide nearly as much electricity to New Jersey customers as nuclear, oil and natural gas do now, an environmental group said Tuesday.
Oceana, an ocean-conservation group, estimated that offshore wind has the potential to produce 92 percent of what nuclear, oil and coal provide now in New Jersey. Wind could meet half the energy demand along the East Coast, the group said.
Founded in 2001, Oceana is an international nonprofit based in Washington, D.C. The group said offshore wind has the potential to generate 30 percent more electricity on the East Coast than new offshore oil or natural gas.
“We wanted to show that you could get more energy for less money if you developed wind rather than developing oil and gas,” said Jackie Savitz, one of the authors of the report titled “Untapped Wealth.”
Three companies, including Cape May-based Fishermen’s Energy, plan to build windmills off the New Jersey coast. Fishermen’s Energy reserved immediate comment on the Oceana report.
Critics of offshore wind, including the Somers Point group Liberty and Prosperity, say offshore wind is a public boondoggle that will lead to higher bills for New Jersey electricity customers. The conservative group The Heritage Center for Data Analysis published a report this year suggesting that government policies giving preference to renewable energy — such as the policy passed this year in New Jersey guaranteeing buyers for wind power — would lead to higher utility bills.
Liberty and Prosperity founder Seth Grossman said offshore windmills are estimated to cost three times what onshore windmills cost.
“It makes no economic sense. If windmills are so effective why not build them in the meadows of New Jersey for a third of the cost,” he said.
Oceana estimated that offshore wind from Maine to Florida could generate 127 gigawatts of power. By comparison, the United States overall produces 1,048 gigawatts per year of electricity.
The five windmills at the Atlantic County Utilities Authority have a total generating capacity of 8.5 megawatts. Newer wind turbines generate about 2.5 megawatts. By this math, East Coast waters would have to host about 50,800 windmills to produce 127 gigawatts.
But more efficient turbines are being development that would generate 5 megawatts or more each.
Oceana said New Jersey ranks fourth behind Delaware, Massachusetts and North Carolina in potential for wind supplanting other forms of energy on the East Coast.
New Jersey’s environmental groups have endorsed offshore wind as an alternative to new nuclear, oil or coal plants.
“We’ve been saying that for some time: we have the Saudi Arabia of wind off our coast,” said Jeff Tittel, spokesman for the New Jersey chapter of the Sierra Club. “New Jersey in the near future could get 20 to 25 percent of its energy needs from offshore wind and up to 50 percent in the long term.”
Nuclear power is king in New Jersey, meeting half the state’s energy needs. And with PSEG planning a fifth nuclear plant in Salem County, the industry’s domination of the market is unlikely to be challenged by wind anytime soon.
President Barack Obama earlier this year lifted a ban on offshore drilling in the Mid-Atlantic stretching to the mouth of the Delaware Bay. But offshore drilling became vastly unpopular this year in the wake of the British Petroleum oil spill in the Gulf of Mexico.
New Jersey’s congressional delegation, Gov. Chris Christie and state lawmakers largely oppose allowing offshore drilling for fear a spill could harm the state’s lucrative tourism industry. Lawmakers want to spur new manufacturing in Paulsboro, Gloucester County, to equip the new wind farms.
Offshore wind is near population centers, where energy demand is highest. Oceana said the new industry could boost manufacturing in the United States, with between 133,000 and 212,000 new jobs, or more than three times as many as created by offshore oil or natural gas.
Oceana sees offshore wind as the lesser of many evils when it comes to energy generation, Savitz said.
“It’s tempting to say, ‘Nothing in my ocean.’ But what we see happening with climate change requires us to think about how the ocean can be part of the solution,” she said. “The bottom line is the kinds of impacts we can expect from climate change so heavily outweigh the potential impacts of offshore wind that we think it’s necessary to move in that direction.”
Secretary of Interior Ken Salazar promises to speed approvals for offshore wind projects, signs first lease for offshore wind energy
Secretary of the Interior Ken Salazar promised Wednesday to speed approvals for offshore wind projects to kick-start the new industry.
Salazar was the keynote speaker during the North America Offshore Wind Conference at the Atlantic City Convention Center. Lt. Gov. Kim Guadagno is scheduled to address the international conference today.
After making his remarks to hundreds of industry officials, Salazar signed the nation’s first ocean lease for offshore wind, the 130-turbine Cape Wind project off Massachusetts.
Several other offshore-wind projects, including at least three in New Jersey, are following close behind.
"Today is a historic date for America on wind energy," Salazar said.
Cape Wind struggled for eight years to win state and federal approvals, and succeeded only after agreeing to scale down the size of the project and reduce its ocean profile.
"Eight long years. How many companies can withstand that uncertainty?" Salazar said. "Our responsibility is to take the lessons learned from that long and painful process and build a smart program. We can cut permitting time significantly if we are focused and proactive."
Salazar said his department was determined to avoid the regulatory mistakes with offshore wind that occurred with offshore oil and was responsible in part for British Petroleum’s Deepwater Horizon oil disaster earlier this year.
"The oil and gas industry ventured into deeper water without oversight," Salazar said. "The safety, technology and regulatory framework were left far behind. That gap is simply unacceptable, and it’s a gap I am determined to close."
Salazar’s department reorganized the Minerals Management Service this year in the wake of the oil spill after conflicts of interest were identified between regulators and the industry. The agency is now called the Bureau of Ocean Energy Management, Regulation and Enforcement, and will oversee offshore wind leases as well.
"We are requiring companies that want to drill to prove they can deal with blowouts. We are working to put science back in its rightful place. We are building a stronger agency," Salazar said.
The Atlantic Ocean has 1.7 billion acres of development potential for offshore wind. Salazar suggested wind companies work closely to economize the transmission lines stretching between the shore and the distant wind farms.
The theme of the conference’s opening remarks was momentum, with comparisons to the 1960s technology and space competition between the former Soviet Union and the United States.
"This is a race to the moon. And it’s our race," said Denise Bode, chief executive for the American Wind Energy Association. "Offshore wind is the new frontier for our industry."
Bode called for streamlining permitting for offshore wind and extending tax credits for companies that invest in the renewable resource.
Offshore wind remains a controversial topic in some quarters. Critics such as the Somers Point group Liberty and Prosperity say it is unnecessarily expensive when so much open space is available on land. Some studies suggest offshore wind will lead to higher household electric bills.
But many people in New Jersey are embracing the concept.
Paul Gallagher, vice president of the Atlantic County Utilities Authority, said its successful 5-turbine wind project off Route 30 has won over many visitors to Atlantic City and influenced the local debate over offshore wind.
"Five years ago, it not only changed the skyline of Atlantic City, but it changed the perception of wind energy in New Jersey," he said. "For thousands of visitors, those five turbines are their first and lasting impression of wind energy."
Gallagher is an executive with Fishermen’s Energy of Cape May, which plans to build a small pilot project 2.8 miles off Atlantic City before tackling a larger one farther from shore.
While Cape Wind received the first federal lease for offshore wind, Fishermen’s Energy thinks it can get its demonstration project running before the Massachusetts wind farm.
It launched a wind and data buoy earlier this year and is studying bird migrations from the Steel Pier, which wants to build its own turbines.
Two other companies, Garden State Offshore Wind and NRG Bluewater Wind, also plan to build wind farms between Atlantic City and Avalon in Cape May County.
Gov. Chris Christie signed legislation this year that creates an artificial market for wind energy in New Jersey and provides tax credits to manufacturers whose products will support the industry.
New Jersey is one of 10 states in a coastal consortium to develop the new industry.
By Michael Miller, www.pressofatlanticcity.com
