Dive Brief:

• The New Jersey Board of Public Utilities (BPU) opened on Monday the largest single-state solicitation of offshore wind in the U.S., for 1,100 MW of capacity.
• The BPU aims to act on applications by July 1, 2019. Federal investment tax credits for offshore wind developers are currently set to expire at the end of next year and the BPU press release estimates tax credits could cover 12% of the total project's price tag.
• Dem. Gov. Phil Murphy asked the BPU last week to open two additional 1,200 MW solicitations in 2020 and in 2022. The state is working toward a 3,500 MW goal of offshore wind capacity by 2030 and a 100% clean energy goal by 2050.

Dive Insight:

The U.S. struggles to lower costs and create economies of scale for offshore wind projects as they are behind other regions of the world in the amount of the renewable resource deployed. But that may change given the recent pipeline of projects on the East Coast.

It could take as few as a couple of 100 MW projects to help establish economies of scale and a supply chain, Marlene Motyka, the U.S. and Global Renewable Energy principal at Deloitte Transactions and Business Analytics, told Utility Dive.

"That alone I think will be a huge step in the reduction in the cost and the synergies," she said.

The extent of New Jersey's solicitation hints that the state intends to become a focal point for the industry. Procurement on that scale "will drive deeper supply chain development," according to Clint Plummer, VP of development from Deepwater Wind. The developer is responsible for the first offshore wind farm in the U.S., in Rhode Island. It's also working on four other projects that have been awarded, in addition to plans for the New Jersey solicitation.

Motyka was the lead author on Deloitte's renewable energy trends report released last Thursday. The report claimed offshore wind is reaching cost parity on a global scale, forecasting that U.S. offshore prices will decline to Europe's and China's levels within the next decade.

States along the eastern coast have set goals to build upwards of 8,000 MW of offshore wind capacity, according to Plummer's estimates. "We see this as an opportunity for the market to develop a supply chain that's capable of delivering on that magnitude of projects," he said.