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Ørsted wins rights for New Jersey's 1st offshore wind farm of 1.1 GW

Walney Extension Offshore Wind Farm. Source: Ørsted A/S

June 24 (Renewables Now) - Denmark’s Ørsted A/S (CPH:ORSTED) has emerged as the preferred winning bidder in New Jersey’s first offshore wind solicitation with a 1.1-GW project called Ocean Wind.

The Danish offshore wind major announced the award by the New Jersey Board of Public Utilities (NJBPU) on Friday. Together with Public Service Enterprise Group (NYSE:PEG), also known as PSEG, it will have the right to negotiate a 20-year offshore wind renewable energy credit (OREC) for the huge project that will be built about 15 miles (24.1 km) off Atlantic City. PSEG’s non-utility affiliates will provide energy management services and potential lease of land for use in the project development and execution phase.

According to the press release, PSEG will have the chance to become an equity investor in the project, the construction of which is seen to be wrapped up by 2024. Once powered up, the wind farm will supply electricity to over 500,000 local households.

The Danish group has unanimously received the winner status by offering a first-year OREC price of USD 98.10 (EUR 86.2) per kWh, NJBPU said separately, adding that the project offers the “lowest reasonable cost and risk.” The levelised net OREC cost, meanwhile, which represents the actual OREC costs paid by ratepayers after energy and capacity revenues are refunded to them, stands at USD 46.46/MWh. The regulator estimates that the scheme will bring about USD 1.17 billion in net economic benefits to the state.

Ørsted’s rivals in the 1,100-MW competition were Norway’s Equinor ASA (NYSE:EQNR), through Broadwalk Wind, and Atlantic Shores Offshore Wind, a 50/50 joint venture between EDF Renewables North America and a unit of oil and gas major Royal Dutch Shell Plc (AMS:RDSA).

(USD 1.0 = EUR 0.879)

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Veselina Petrova is one of Renewables Now's most experienced green energy writers. For several years she has been keeping track of game-changing events both large and small projects and across the globe.

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