Posted on November 3, 2021
Lease prices for manufacturing could run $200,000 per acre for two parcels totaling about 40 acres, with the potential to generate millions in lease revenue.
New Jersey has received bids from six potential tenants, all global renewable energy leaders, to lease parts of a new 200-acre port the state is building in Salem County to foster its nascent offshore wind industry.
State officials said that they were pleased with the quality and competitiveness of the offers, and that they believe their goal of establishing an East Coast manufacturing base for the massive components required for turbine farms is in reach.
“The New Jersey Wind Port is a game-changing investment that establishes New Jersey as the capital of offshore wind in the United States,” Gov. Phil Murphy said in a statement. “The overwhelming response to this early opportunity to lease space at the Wind Port from the biggest global players in offshore wind shows that we are already well on our way to achieving this vision and driving economic growth that firmly aligns with our environmental goals.”
Bidders who plan to place marshaling operations — staging, assembling, and shipping — at the port include, not surprisingly, Ørsted Wind Power North America and Atlantic Shores Offshore Wind. Both companies are already set to build wind farms in federal waters off the state’s coast pending federal approval. Beacon Wind, which plans an offshore wind project in New York, has also expressed interest in the nonbinding agreements that the state put out to bid in September.
Other bidders for manufacturing plan to build turbine components, including blades and nacelles, the housing that contains gears, shafts, generators, and other parts. They include GE Renewables, Siemens Gamesa Renewable Energy Inc., and Vestas-American Wind Technology. They are the three largest offshore wind turbine manufacturers in Europe and the United States, according to state officials.
Prices for two marshaling parcels run from a minimum of $500,000 per acre a year for a four-year lease to $425,000 per acre a year for longer leases. However, the bid prices, which were not disclosed, could run higher. The two parcels total 60 acres and could generate tens of millions in leases, with 79 more acres available for lease in the future.
Lease prices for manufacturing could run $200,000 per acre for two parcels totaling about 40 acres, with the potential to generate millions in lease revenue. Again, the prices of the bids have not been disclosed.
The state is also asking bidders how many direct and indirect jobs they plan to create, how much they plan to spend on their facilities, what they’ll do to attract other companies in the supply chain, and an estimate of state, county, and local taxes that the operations could generate.
“The results of this bid process so far are really validating what Gov. Murphy is saying about this wind port, that it’s extremely well-positioned,” said Tim Sullivan, CEO of the state’s Economic Development Authority, which is developing the wind port. “There’s a competition among New Jersey and other states to be the home of wind. I think the wind port … in New Jersey is in the pole position to be that leader.”
New Jersey officials hope to capture not only manufacturing, but other parts of the supply chain from the rising offshore wind industry. This month, the Biden administration has expanded plans for offshore wind leases along much of the U.S. coast, including the New York Bight, which spans from Cape May to Long Island. However, it’s too early to tell how many wind farms could rise because of that.
Sullivan said New Jersey’s port on the Delaware Bay is well positioned because it is being built expressly for offshore wind and offers obstruction-free shipping to the ocean. Vessels can’t fit under bridges, for example, as they carry high vertical structures.
Bidders plan to set up operations to stage, assemble, and ship completed steel turbine towers that span hundreds of feet. Wind turbine components can run 500-feet tall. When fully built-out on the ocean, the completed turbines can run 850-feet tall and weigh hundreds of tons. And hundreds of them will be needed to complete the state’s offshore wind plans.
“They’re as tall as the Washington Monument when they go out to sea,” Sullivan said.
Sullivan noted that Siemens Gamesa and Equinor, which is developing Beacon Wind, had not expressed interest in operating in New Jersey before.
Bids for wind port leases were due Oct. 22 for space on what’s essentially an artificial island off Lower Alloways Creek Township. Construction is planned in two phases across multiple parcels. Officials hope to select winning bids and start lease negotiations in coming months.
Sullivan said site preparation is underway at the wind port. A separate manufacturing area is under construction at the Paulsboro Marine Terminal upriver in Gloucester County. There, EEW Group is replicating its German factory in a $250 million project to build 400-foot-long, 2,500-ton steel monopoles that are driven into the ocean floor as foundations for the turbines.
The wind port, which state officials estimate could cost from $300 million to $400 million to build, is located next to the Hope Creek nuclear plant, operated by PSE&G, whose parent company is PSEG.
PSEG has partnered with Ørsted in the state’s first offshore wind project, a 1,100-megawatt installation a dozen miles off the coast of Atlantic City. PSEG and Ørsted announced Thursday that they have separately submitted proposals to transmit the power to the regional grid.
The state’s Board of Public Utilities has approved a second offshore wind project by naming two developers to produce 2,658 megawatts of energy off the coast — enough to power 1.15 million homes. The project is split between Atlantic Shores Offshore Wind LLC, a partnership of Shell New Energies US and EDF Renewables North America; and Ocean Wind 2 LLC, an Ørsted subsidiary.
The Murphy administration has a plan to achieve 100% clean energy by 2050, in part, through 7,500 megawatts of offshore wind energy by 2035 and more projects are planned.
State Sen. President Steve Sweeney, who is also a labor leader, said the wind farm will create union jobs.
“I’m just excited because it’s in Salem County, the second poorest county in the state,” Sweeney said. “I’m really excited about the potential for jobs.”
