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Ørsted wins New Jersey tender

While Ørsted maintains its nomination of GE as supplier, EDF and Shell select Vestas' coming 14-MW turbine for their 1.5-GW project.

Photo: Ørsted

For a developer, it's always positive to win a project allocation, but for Ørsted the victory is even sweeter being that the Danish power company's Ocean Wind 2 bid won in New Jersey's second offshore wind solicitation Wednesday afternoon.

Not only is the project of 1.148 GW the second-largest to date for Ørsted, the triumph also quenches the utility's thirst after two years of drought in the US market, where the global offshore leader hadn't won a bid since taking home 880 MW from New York state's auction in July of 2019.

As the name indicates, this project is a follow up to Ørsted’s first win in the same state, Ocean Wind f 1,1 GW. The new project, to located roughly 22 kilometers from shore, is planned to be installed in three phases, with commissioning set for 2028 and 2029.

Higher price than in 2019 

With a formally solicited total capacity of up to 2.4 GW, the round also left room for other winners. That Shell and EDF’s joint venture won rights to develop their Atlantic Shores project should come as no huge surprise considering the fact the JV was the only other participant in the round. The project will achieve 1,509.6 MW and be developed in two phases, with one finishing in 2027 and the other in 2028.

Combined, the two projects will reach 2.658 GW, thereby making New Jersey’s round the hitherto-largest single capacity tender held in the US. However, it was by no means the cheapest – although still less expensive than the offshore wind renewable energy certificate (OREC) payment of USD 98.1 per MWh for the project’s first year with which Ørsted won the round.

For Ocean Wind 2, the first-year price comes to USD 83.03 per MWh, while Atlantic Shores will fetch USD 86.62 per MWh – both cases being dearer than, for instance, Ørsted’s winning New York bid of USD 80.62 per MW from two years back.

Wind is costly

Some changes were also made to the parameters used to decide offshore wind allocations. Whereas price in, for example, New England’s first tender, weighed 70 percent, that criterion was only 50 percent of the matter in New Jersey’s second auction.

Nonetheless, cost was noted by by the New Jersey Board of Public Utilities (NJBPU), which said this rounds’s prices do not represent the next stage in the continuously declining cost curve of offshore wind.

“Unfortunately, wind is expensive,” said one of NJBPU’s commissioners, Diana Solomon:

“We had hoped the OREC would have been lower. Next time perhaps.”

First project to use Vestas’ new turbine

Whereas Ørsted maintains its supplier nomination of GE Renewable Energy, another OEM has also gained a piece of the prize. Further, the sweetness of victory for Ørsted can be only be matched in the case of Vestas.

The newly minted offshore wind turbine maker is selected to supply its machines to EDF and Shell’s project. More precisely, a NJBPU spokesperson said that Atlantic Shores is planning to use turbines rated at 13.6 MW made by the Danish OEM  – which makes the project the first known undertaking set to use the coming platform’s units.

English Edit: Daniel Frank Christensen

US opens next offshore wind auction 

Ørsted denies acquisition is "defensive"

Ørsted closes quarter-stake sale of Ocean Wind 

 

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