A Cape May company hopes to be the first in North America to transmit electricity from an offshore wind farm, although new state regulations may both help and hinder start-up projects.
This month, the state Board of Public Utilities adopted rules to establish an offshore wind energy program, but also to require cost-benefit analyses well as construction and financing plans.
Fishermen's Energy of Cape May, a company backed by commercial fishing firms, beat the BPU to the punch. A day before the board adopted the new rules, Fishermen's Energy filed plans to build a small wind farm about three miles off Tennessee Avenue in Atlantic City.
The location provides potential advantages to getting the turbines up and running. Located in state waters, the area is shallower and closer to shore, cutting costs and potential regulatory hurdles, than larger projects discussed off New Jersey and New England.
The company touts the involvement of commercial fishing firms, with boats and crews used to operating in New Jersey waters, as another plus for the venture.
The state rules followed an announcement earlier this month by the federal Interior and Energy departments of a joint strategy to encourage investment in offshore wind facilities, as well as grants of up to $50.5 million to develop technology and reduce barriers in specific markets.
Like other would-be wind energy generators, Fishermen's Energy plans a larger wind farm farther offshore. But the prospect of a quicker, smaller project to demonstrate the potential already has company President Daniel Cohen touting it as a boon to tourism as well as to the power grid.
Indeed, as the BPU approved rules for its Offshore Wind Renewable Energy Certificate program, board President Lee Solomon cited a quick turnaround time on applications. Once staff determines a proposal is complete, the board will have 180 days to review and act on it.
In contrast, the Cape Wind Project, located in national waters in Nantucket Sound, took five years to obtain federal clearance after an initial approval from Massachusetts in 2005.
The BPU approach is "is good news for renewable, in-state, electric generation," Solomon said. Future generating capacity has become more of an issue since December, when the state Department of Environmental Protection decided to allow Exelon Corp.'s Oyster Creek nuclear plant to close in 2019 rather than add cooling towers or contribute to a new initiative to clean up Barnegat Bay.
But the BPU also wants to make sure that the technology – already widely used on land but not offshore in North America – is a boondoggle. As much as anything, the Christie Administration wants proof that wind projects will help the economy.
Whether Atlantic City really becomes the birthplace of offshore wind in the United States may depend on how soon the BPU gets the certificate program going under the new regulations. The board's initial assessment is that it might take 18 months or more.
Once it does, Fishermen's Energy will need to demonstrate that even a field of six wind turbines will meet the BPU requirement for positive net economic impact. While wind power is cleaner than fossil fuels, the question has been whether it can be cost competitive.
Construction of offshore wind sites surged in Europe last year, with the British Isles and Denmark leading the way. But the EU's generally higher fuel prices make alternative power more cost-competitive. An analysis last week by Reuters found natural gas remains cheaper, but wind is competitive with dirtier fossil fuels in some markets.
But given New Jersey's emphasis on up-front economic benefits, at least one of the four offshore wind farm proposals here, from Garden State Offshore Energy, may be enlarged in an attempt to improve the potential net benefits.
Elsewhere here and abroad, towering turbines have created concerns about potential health or environmental effects, as well as aesthetic criticism of their impact on views, as off Massachusetts.
Last year, nearly 10,000 megawatts of wind power capacity were installed in the European Union, according to the European Wind Energy Association. But while wind power now provides an estimated 10 percent of the EU's energy, almost half the recently proposed projects faced lawsuits, according to a story in Washington Post.
Just as the BPU was moving ahead with the rules, one of the leaders in wind power in North America unexpectedly called a halt to such projects. The government of Ontario announced it would not approve proposed offshore wind turbines without further scientific review.
The move immediately after the Canadian Wind Energy Association trumpeted the fact that wind now provides more than 6 percent of the province's electricity, surpassing coal as a power source.
