Bringing the energy generated by offshore wind farms to shore could be considered the “easy” part of connecting an offshore wind farm to the grid at least as compared to the process and grid upgrades required to get that energy interconnected onshore and delivered to customers on the East Coast, which will require a slew of new substations, transmission and distribution lines.
On November 1, FirstEnergy company Jersey Central Power and Light (JCP&L) said it and partner Mid-Atlantic Offshore Development, LLC (MAOD) were awarded the construction responsibility to connect the energy generated by New Jersey’s offshore wind farms to the power grid.
The New Jersey Board of Public Utilities (BPU) selected the proposal — the Larrabee Tri-Collector Solution (LTCS) — out of 80 submitted by 13 different transmission developers in the nation’s first so-called coordinated offshore wind transmission bidding process, said the companies.
MAOD is a new company owned by Shell New Energies US, LLC and EDF Renewables North America. Now that the project has been awarded, FirstEnergy has the option to acquire up to a 20% equity stake in MAOD with BPU approval.
Coordinated ApproachThe coordinated transmission solution is intended to minimize cost and other impacts while supporting the continued expansion of offshore wind energy in the state, the companies said. The project represents one of the first uses of the State Agreement Approach (SAA) between the NJBPU and PJM, utilizing PJM’s competitive transmission planning process to help NJBPU solicit and evaluate the 80 different transmission proposals.
The NJBPU also awarded onshore grid upgrade projects to enable the capacity injection afforded by the LTCS to Atlantic City Electric, BGE, LS Power, PECO, PPL, PSEG, and Transource.
MAOD estimates that the selected projects will save New Jersey ratepayers $900 million compared to the cost of transmission without utilizing this coordinated approach through the SAA.
Under the SAA process PJM designed a transmission solicitation together with NJBPU staff that was issued in April 2021. The SAA solicitation closed in September 2021.
The NJBPU determined that the LCTS and other projects best meet the goals of the SAA solicitation and will result in a more efficient and cost-effective means of achieving 7,500 MW of OSW by 2035, the state’s offshore wind goal at the time of the solicitation.
Efficiencies and CostsThe MAOD said the JCP&L-MAOD proposal is estimated to cost $504 million and the necessary onshore grid upgrade projects are estimated to cost $568 million, for a total of $1.07 billion for the full LTCS. JCP&L said it will be responsible for approximately $723 million worth of new transmission and upgrades to existing transmission. The cost of the project is expected to be shared by all New Jersey electric customers.
One part of the NJBPU’s decision requires the successful bidder to New Jersey’s third offshore wind generation solicitation to prebuild a single corridor from the shore crossing to the LTCS. This single corridor will be designed to be utilized by offshore wind projects needed to reach 7,500 MW. This is expected to result in a single onshore transmission corridor which will reduce environmental impact, community disruption, and permitting risks.
The NJBPU said it anticipates issuing the third solicitation in Q1 2023.
Power from offshore wind farms in central New Jersey will be delivered onshore to a collection point in Monmouth County. The electricity then will be converted from direct current (DC) to the alternating current (AC) power that flows through the grid. Electricity will enter JCP&L’s transmission system at the company’s Larrabee, Atlantic and Smithburg substations, all located in Monmouth County.
The NJBPU also highlighted the cost-efficiency and environmental benefits of JCP&L’s plan because it protects communities and the environment by utilizing existing rights of way with no greenfield development. In addition, the use of a single transmission corridor to bring the electricity onshore will reduce environmental impacts and community disruption.
New Jersey Governor Phil Murphy recently increased the state’s offshore wind goal to 11 GW by 2040. The NJBPU also directed its staff to begin preliminary steps to support a future SAA solicitation to enable the transmission of that additional offshore wind (OSW) capacity. It also directed staff to continue its engagement with other states, regional grid operators, and other stakeholders regarding a regional approach to OSW transmission.
The award will now be reviewed by the PJM Board in accordance with its Regional Transmission Expansion Plan process. Project construction is expected to begin in 2025, with completion targeted by 2030.
