New Jersey Kicks Off Work on Second Offshore Wind Transmission Tender

February 6, 2024, by Adrijana Buljan

The US regional transmission company PJM Interconnection and the New Jersey Board of Public Utilities (NJBPU) have signed an agreement that opens the path towards New Jersey’s second offshore wind transmission tender. The agreement was filed with the Federal Energy Regulatory Commission (FERC) on 2 February.

PJM and NJBPU’s new collaboration is the next phase of the State Agreement Approach (SAA 2.0), after New Jersey procured a transmission solution to connect 7.5 GW of offshore wind energy in 2022 under its first SAA with PJM (SAA 1.0) and became the first US state to utilise this approach.

“The continued collaboration between PJM and New Jersey through the State Agreement Approach underscores PJM’s commitment to reliably and cost-effectively facilitating states’ renewable energy policy goals,” said PJM President and CEO Manu Asthana. “PJM’s competitive planning process allows for creative solutions to complex infrastructure challenges. New Jersey has been a leader in this approach and can be a template for other states pursuing their individual energy policies.”

The document now filed with the FERC is the SAA 2.0 Study Agreement, which allows New Jersey to initiate a PJM study that examines whether an integrated suite of open-access transmission facilities designated to support the delivery of offshore wind could best facilitate meeting New Jersey’s expanded offshore wind goals in an economically and environmentally efficient and timely manner, according to NJBPU.

The study agreement will consider the interconnection of an additional 3.5 GW of offshore wind energy capacity to reach 11 GW by 2040, a target set under an executive order signed by New Jersey Governor Phil Murphy in 2022.

According to the document, “(…) NJBPU staff identified several possible options to be explored through the competitive proposal window process to be run by PJM, including onshore substations, offshore substations with connections to onshore substations, and offshore backbone transmission lines connecting multiple offshore wind projects.”

The SAA 2.0 Study Agreement was signed after NJBPU issued the SAA 2.0 Request Order on 26 April 2023, requesting PJM conduct a competitive solicitation for offshore wind transmission facilities according to certain New Jersey-requested specifications.

PJM will first perform an informational study that evaluates the injection of the additional 3.5 GW of offshore wind generation capacity, developing scenarios that will allow the NJBPU to optimise the grid connection points to provide the greatest value for its requirements. After receiving the study, the NJBPU must notify PJM of the actual amount of capability and desired injection points to be included in the competitive window and may request that PJM open the SAA 2.0 proposal process, according to the file submitted to FERC.

New Jersey held three auctions for offshore wind so far, procuring 7.4 GW of generation capacity.

In 2019, the state awarded a contract to Ørsted’s 1.1 GW Ocean Wind project, which the developer recently cancelled due to additional supplier delays impacting the project schedule.

In 2021, the second solicitation resulted in 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 2 projects.

In January this year, New Jersey procured two new offshore wind projects totalling 3,742 MW. In its third offshore wind solicitation, New Jersey has selected Leading Light Wind (2,400 MW), developed by Invenergy and energyRE, and Attentive Energy Two (1,342 MW), developed by a joint venture between TotalEnergies and Corio Generation.

On 29 November 2023, New Jersey Governor Phil Murphy directed the New Jersey Board of Public Utilities (NJBPU) to launch the fourth offshore wind solicitation in early 2024, instead of the third quarter of this year, accelerating the schedule of the fourth solicitation and the state’s move to reaching its offshore wind targets.