Offshore Wind Back on Track After NJBPU Accelerates Fifth Offshore Wind Solicitation and Finalizes Orsted Settlement

Trenton – The New Jersey Board of Public Utilities issued a barrage of offshore wind announcements today, most prominently announcing a more rapid timeline for the projected fifth offshore wind solicitation to the second quarter of 2025 from the third quarter of 2026.  The Board also announced a $125 million settlement for the long-running dispute with Orsted for their sudden decision to cancel the Ocean Wind projects last fall. The Board also announced it would pause the current planning process for the Second State Agreement Approach, a landmark coordinated planning agreement between the NJBPU and PJM on offshore wind transmission because of FERC’s recent Order 1920 on regional grid transmission.

Environment New Jersey Director Doug O’Malley released the following statement in response to the Murphy Administration’s offshore wind announcement:

“The acceleration of the fifth offshore wind solicitation from NJBPU clearly shows there is an intense interest to build offshore wind off the Jersey Shore. The solicitation process has provided clarity and certainty for offshore wind in New Jersey. By bumping up NJ5 by more than a year, it shows that the interest in building offshore wind off the Shore is only intensifying.

Offshore wind remains the best strategy for the state to generate clean, renewable energy and reduce climate pollutants from fossil fuels. Last year was the warmest year on record, and as other states have constructed offshore wind, New Jersey should move forward with offshore wind – which is our best strategy to combat climate change.

“The settlement from Orsted after they abruptly pull the plug on the Ocean Winds project at least proves there is one good mitzvah that will come from that decision. The clawback settlement of $125 million from Orsted – while not near the amount they owed to New Jersey – is a good downpayment on expanding the offshore wind supply chain. Orsted owed more, but it is unclear if they could have been forced to pay the full bill. Orsted blustered they wouldn’t pay any of their debts, and this settlement will provide immediate funding for the offshore wind infrastructure for New Jersey.

The other critical question is the fate of Orsted’s Wind Energy Area off of Atlantic City. The potential for offshore wind is still as strong as the day Orsted cancelled their project last fall, and the risks from sea level rise are still as stark. Orsted should move to sell their lease as quickly as possible – there is clear interest from other developers in the area that can power hundreds of thousands of homes with clean energy.

FERC clearly is putting a huge thumb on the scale on moving forward with making a more resilient and faster electric grid with Order 1920.  This is the best kind of pause for the NJBPU for the Second Special State Agreement (SSA). FERC is moving aggressively to deal with one of the biggest challenges to clean energy across the country – getting more clean energy projects onto the grid. NJBPU’s SSA partnership with the PJM electric grid was groundbreaking – and incorporating the FERC order – and issuing a pause – make absolute sense.”

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