Testimony For NJBPU Hearing on Third Offshore Wind Solicitation

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Background Info:  The New Jersey Board of Public Utilities (NJBPU) has issued the draft solicitation guidance document for New Jersey’s third Offshore Wind Solicitation.  In 2019, New Jersey made history by awarding the largest single offshore wind project in the country to Ørsted’s 1.1 GW Ocean Wind project to be built 15 miles off the coast of Atlantic City. New Jersey again made history in 2021 with the largest combined award of 2.6 GW of offshore wind capacity to EDF/Shell’s Atlantic Shores Offshore Wind and Ørsted’s Ocean Wind II projects. NJBPU has awarded a total of 3.7 GW of offshore wind capacity, as part of the commitment by the Murphy Administration to reach 11 Gigawatts of offshore wind power by 2040 through an Executive Order signed this September. There are several new requirements proposed in the third Solicitation, including setting the solicitation target range from 1,200 MW to 4,000 MW; offering an inflation adjustment mechanism; providing specific direction on New Jersey’s requirements for new or expanded supply chain facilities; providing minimum standards for the environmental and fisheries protection plans; setting the evaluation criteria weighting to 70% price and 30% non-price factors; and incorporating necessary information resulting from the NJBPU’s State Agreement Approach transmission decision in October.

Testimony: Good afternoon, my name is Doug O’Malley, and I serve as the director of Environment New Jersey, representing more than 80,000 citizen members and activists. The greatest threat to the Jersey Shore, our state and the region is the threat of climate change. Climate change is the greatest existing threat to wildlife, resulting in 1 million animal and plant species that are currently threatened with extinction due to a rapidly changing environment, according to a United Nations report. New Jersey has the fastest rate of sea level rise on the East Coast and our state is second in the nation for most homes at risk both in 2045 and by the end of the century, according to the Union of Concerned Scientists. Rutgers University working with the NJDEP has outlined the risks of sea-level rise from climate change along the Jersey Shore range from up to 2 foot in 2050 to up to six feet in 2100. The climate crisis demands that we quickly develop renewable energy, and offshore wind is critically important for NJ to reach the state’s economic development and environmental justice goals.

What are the costs of not acting? The bad news is pretty bleak: In the past five years climate disasters — hurricanes, floods and other types of extreme weather — have taken a $12 billion bite out of New Jersey’s economy. Unfortunately, the bad news gets worse: The economic losses of the past five years account for 40% of all climate-driven losses since 1980, according to a new report from Environmental Entrepreneurs. Translation: Climate-change disasters are more common now than a few decades ago. The answer: The jury’s still out but the final bill is going to be A LOT.

$25 Billion: That’s the minimum down payment for short-term defense against rising seas in New Jersey. As temperatures warm and coastal tides creep inland, communities across the country are facing billion-dollar price tags for basic coastal defenses. The Center for Climate Integrity partnered with Resilient Analytics, an engineering firm specializing in climate adaptation, and mapping and GIS specialists at the University of Colorado, to calculate the direct cost of building seawalls to protect the contiguous U.S. from the near term risks of rising seas. The above figure represents a conservative estimate of what it will take to safeguard businesses, homes, roads, and entire communities in New Jersey from chronic flooding by 2040 under a moderate sea-level-rise scenario.

The IPCC, the Biden Administration and the U.S. Climate Alliance all share the same goal – reduce climate pollution by 50% by 2030, which is in line with the scientific standards. New Jersey is no exception and more than a year ago, Gov. Murphy signed Executive Order 274 to reduce climate pollutants 50% by 2030. New Jersey has started to take steps to reduce emissions from our transportation sector, our building sectors, but we need to transition off fossil fuels in our building sector. The last coal plant in the state stopped running in South Jersey earlier this year, and the Logan coal plant was imploded earlier this month – that’s progress. But we need to transition away from gas-fired power plants as well as this decade. The cost of fossil fuels continues to torch our climate but also creates a real and enduring public health crisis for the more than 600,000 asthmatics in the state, including more than 150,000 children.  We need to replace this energy with clean, renewable energy — and offshore wind is the best source.

There’s no free lunch in generating energy – but the impacts of fossil fuel extraction, transportation and combustion are undeniable – and why we’re in a climate crisis. Europe has already led the way by building more than 5,000 turbines off their coasts. In America, we only have two commercial offshore wind projects up and spinning but the potential in New Jersey is limitless. The first proposed project, Ocean Wind 1, will produce more than 1100 MW of energy, enough to power more than 1,100 homes. There is undeniably broad public support for offshore wind, which was outlined in the October Eagleton Institute polling data on climate and clean energy. The NJBPU has been an undeniable key leader in the field of working to make offshore wind a reality and one of the key components is creating a solicitation schedule that is measured but aggressive, certain but adjusted to increase as technology gets better, and perhaps most importantly multi-year and multi-decade.

Passage of the Inflation Reduction Act this summer threw the full financial weight of the federal government behind the clean energy transition. As a result, carbon emissions and electricity costs in the nation’s largest electricity market, the PJM Interconnection, will both decline sharply through 2030, according to a new study from Princeton University’s ZERO Lab.

Detailed electricity system modeling that finds that states across the PJM region could cut carbon emissions as much as 80 to 90% from current levels by 2035 while maintaining bulk electricity supply costs comparable to or lower than levels experienced in recent years. The law also subsidizes the cost of deploying new renewable energy capacity and maintaining the region’s existing nuclear fleet. As a result, this study finds that clean electricity could supply 60% of PJM demand in 2030, up from 48% without enactment of IRA. However, realizing this potential will require a dramatic acceleration in the pace of wind and solar interconnection and transmission expansion in the PJM Interconnection.

The potential for expansion of clean energy from offshore wind is limitless, but it needs regulatory certainty to make sure we can get offshore wind up and running in New Jersey to fight climate change and unplug our dirty reliance on fossil fuel plants.