In a first for the US, the New Jersey Board of Public Utilities (NJBPU) has selected a package of onshore solutions for offshore wind that take a coordinated approach to transmission
The NJBPU selected the Larrabee Tri-Collector Solution (LTCS) project proposed by Mid-Atlantic Offshore Development (MAOD) and Jersey Central Power & Light Company and awarded onshore grid upgrade projects to enable the capacity injection afforded by the LTCS to Atlantic City Electric, BGE, LS Power, PECO, PPL, PSE&G, and Transource. MAOD is a joint venture of EDF Renewables-North America and Shell New Energies US.
The projects will establish the first coordinated solution for offshore wind transmission in the US, a solution that will minimize cost and other impacts while supporting the continued expansion of offshore wind in the state.
It is estimated that the projects will save New Jersey ratepayers US$900M compared to the cost of transmission without utilizing a coordinated approach through the so-called ‘State Agreement Approach’ (SAA). The SAA enables a state or group of states to propose a state-initiated project that can realize public policy requirements as long as the state (or states) agrees to pay all costs of the buildout included in a regional transmission expansion plan.
The board said its decision “was informed by data, analysis, and expertise from New Jersey’s grid operator, PJM Interconnection.” It is the first-ever use of the SAA between the NJBPU and PJM, utilizing PJM’s competitive transmission planning process to help NJBPU solicit and evaluate 80 different transmission proposals.
The Board determined that the projects best meet the goals of the SAA solicitation and will result in a more efficient and cost-effective means of achieving 7.5 GW of offshore wind by 2035, the state’s offshore wind goal at the time of the solicitation.
The Board also directed staff to begin preliminary steps to support a future SAA solicitation, to enable the transmission of New Jersey’s new and expanded goal of 11.0 GW of offshore wind by 2040, and to continue its engagement with other states, regional grid operators, and other stakeholders regarding a regional approach to offshore wind transmission.
Under the SAA process PJM designed a transmission solicitation together with Board staff that was issued in April 2021. The SAA solicitation closed in September 2021, and proposals for 80 projects were received from 13 transmission developers.
The MAOD-JCP&L proposal is estimated to cost US$504M. The necessary onshore grid upgrade projects are estimated to cost US$568M, a total of US$1.07Bn for the full LTCS.
A key component of the Board’s decision is to require a successful bidder to New Jersey’s third offshore wind generation solicitation to prebuild a single corridor from the shore crossing to the LTCS. This single corridor will be designed to be utilized by offshore wind projects needed to reach 7.5 GW. This will result in a single onshore transmission corridor which will reduce environmental impact, community disruption, and permitting risks. The Board anticipates issuing the third solicitation in Q1 2023.
NJBPU president Joe Fiordaliso said, “New Jersey has been at the leading edge of offshore wind development since Governor Murphy took office. This decision is further evidence that we are committed to developing offshore wind and the necessary transmission to shore in the most cost-effective, reliable, and responsible manner possible.”
PJM president and chief executive Manu Asthana said, “This action by the NJBPU represents an important milestone in the development of offshore wind in the US. We see the SAA as a model for how states can leverage PJM’s processes to advance their policy goals.”
