Energy, NEW JERSEY ENERGY ECONOMICS
Offshore wind drives up electricity costs. That’s a bipartisan concern
Audrey Lane | October 22, 2024 | As Seen In The Star-Ledger
Recently, on these pages, Rep. Mikie Sherill penned an opinion piece calling offshore wind “the next frontier in New Jersey’s history of innovation” – invoking Thomas Edison to drive home her point about the state’s history of great economic pioneers.
With all due respect to the Congresswoman, there is a glaring difference between Edison’s inventions and offshore wind, namely, Edison’s inventions worked.
The telephone improved lives, bolstered economic activity and delivered cost-effective technology to everyday Americans that literally changed their lives for the better. Unfortunately, despite its promise, early returns on New Jersey’s investment in offshore wind can be categorized somewhere between uneven and failed.
In her op-ed, Rep. Sherrill claims that investing in offshore wind will “lower energy costs for families.” That statement is false.
In fact, the impact of offshore wind initiatives to date has been the exact opposite. Offshore wind is already costing New Jerseyans through state and federal incentives and that cost will only rise in the form of higher utility bills. This theme was reiterated by energy and utility executives last week during the Assembly Telecommunications and Utilities Hearing in Trenton who warned that without a change to energy policy, our electricity rates will continue to climb without an end in sight.
In Garden State Initiative’s recent report, “The Aspirations and Economics of the New Jersey Energy Master Plan,” we outline the fatal flaw of aspiration in Gov. Phil Murphy’s energy plans. Specifically, while many of the tenets of the master plan are laudable, they are simply not realistic, and no amount of hope is going to change that.
Here are the facts: In September 2022, Murphy signed Executive Order #307, which increased the state’s offshore wind goal to 11,000 MW by 2040. Yet, the following year, Ørsted canceled its much-ballyhooed Ocean Wind I and II projects – which promised 2,200 megawatts of capacity – despite being offered a staggering $1 billion in subsidies that were supposed to help ease the burden on the state’s electricity ratepayers.
This trend is repeating itself in New Jersey – just two weeks ago, New Jersey’s Board of Public Utilities approved a delay to a proposed 2,400-megawatt offshore wind farm months after the firm in charge of the project said supply chain and cost issues kept it from procuring wind turbines.
And abandonment of wind energy projects is not limited to New Jersey. Over the summer, a GE Vernova offshore wind turbine blade installed off Martha’s Vineyard broke. Similar incidents happened in Europe, forcing GE Vernova to pause some of its projects.
Since the Ørsted cancellations one year ago, the BPU Ha awarded contracts for two new offshore wind projects – the 2,400-megawatt Leading Light Wind project and the 1,300-megawatt Attentive Energy Wind project. Notably both new contracts were priced far higher than the Ørsted and Atlantic Shores contracts. Additionally, there is a critical component to these contracts that undermines Sherrill’s promise of lower costs.
The new contracts include escalators for inflation, which will allow the developers to charge up to 15% more than the contract prices. That cost will be passed on to New Jersey’s already overburdened ratepayers and taxpayers.
As a think tank, we believe the best way to achieve balanced public policy in the state is for people of differing opinions to work together, engage in debate, and ultimately find common ground. As such, we were disappointed that Rep. Sherrill suggested that opposition to, and concern about, offshore wind was emanating solely from the right.
The reality is that there is broad and bipartisan concern about the way offshore wind is being implemented off the Jersey Shore, and legitimate questions about the long-term ability to deliver on promises made by Murphy and other offshore wind proponents. Look no further than grassroots citizen groups like Save Long Beach Island, Save Right Whales, Defend Brigantine Beach, and Protect Our Coast NJ, who have filed suit against the Atlantic Shores project off Long Beach Island.
Notably, red flags were also raised by longtime environmental group Clean Ocean Action who said that the “magnitude, scale, scope, and speed of current offshore wind energy development is reckless” and called on both President Biden and Murphy to reevaluate policy decisions.
We commend Rep. Sherrill for her desire to protect New Jersey’s environment now and for years to come – we share that same desire and look forward to the implementation of “all of the above” energy plans for our state. However, we believe all of our public officials have an obligation to study every side of every issue.
Then, and only then, will sustainable policy overcome expedient politics.
Audrey Lane is the president of Garden State Initiative after previously serving as its policy director. Lane has served as a government policy and strategic messaging professional on both the municipal and state level, and as a Councilwoman in Mountain Lakes.