Dive Brief:
- The New Jersey Board of Public Utilities (BPU) announced on Wednesday it has submitted a solicitation to develop offshore wind transmission solutions in 2021 with the regional grid operator, PJM Interconnection.
- The new type of solicitation, dubbed as a State Agreement Approach (SAA), is intended to explore new frameworks to advance offshore wind energy, said BPU President Joseph Fiordaliso. The Board unanimously approved the SAA, which requests PJM to incorporate New Jersey's offshore wind public policy objectives into its transmission planning process starting in the first quarter of 2021, as the state works to add 7.5 GW of the resource by 2035.
- The partnership comes as NJBPU considers leaving PJM's service based on the Minimum Offer Price Rule expansion that would raise the price for new, state subsidized clean energy resources bidding into PJM's wholesale market. Fiordaliso said the BPU has not decided whether it will exit the PJM capacity market through implementing a Fixed Resource Requirement alternative, an option the regulatory body has been exploring since March.
Dive Insight:
The SAA is a pathway for states to contract for the transmission facilities they will seek in the future for specific energy targets. Transmission developers will be able to submit proposals to PJM to address the need for infrastructure to add 7.5 GW of wind.
"We're studying the potential transmission solutions and then the BPU will have a decision to make on what choices they want to make," Manu Asthana, president and CEO of PJM, said. The SAA would allocate the cost of any expansion that occurs under it to the state requesting the expansion, New Jersey, and that allocation would be filed with federal regulators.
BPU staff recommended a coordinated approach to generation and transmission during the state's first two offshore wind solicitations, but with substantial expansion of the resource, "there needs to be an integrated transmission plan early on in the process, so that you're not double building or creating repeated environmental disruption," Fiordaliso said.
The results of the 2021 solicitation will be revealed by PJM later that year in collaboration with New Jersey, according to Ken Seiler, PJM's vice president of system planning.
Offshore wind stakeholders lauded the announcement. The Business Network for Offshore Wind called it "bold action on transmission planning."
"As evidenced by today's landmark announcement, NJBPU understands the importance of incorporating public policy requirements into the transmission planning of regional grid operators, like PJM," Brandon Burke, director of policy and outreach for the Business Network, said in a statement.
PJM is working with other states on their offshore wind goals, and other grid operators along the Atlantic Coast are also cooperating with regulators and state agencies to integrate offshore wind. New York expanded their Climate Leadership and Community Protection Act (CLCPA) in October to increase the state's clean energy target for onshore and offshore renewables to 70% by 2030, spurring greater collaboration between the New York Independent System Operator (NYISO).
The NYISO recently submitted 15 stakeholder proposals to identify potential transmission needs driven by state policy to New York regulators, according to spokesperson Zachary Hutchins. "The NYISO continues to work closely with [the New York State Energy Research and Development Authority] and the State to provide insights on the integration of renewables ... and expertise through the planning process to advance the state's offshore wind projects and meet the CLCPA mandates."
ISO New England is the first U.S. grid operator to work with offshore wind, as the first project in the country cropped up in Rhode Island state waters. The Vineyard Wind offshore project recently finalized their interconnection agreement with ISO-NE.
The grid operator launched a process this year for "a cluster study of wind resources looking to interconnect on Cape Cod," Massachusetts, Matt Kakley, spokesperson for ISO-NE, said in an email.
"Following the release of their vision statement, we've been meeting with the New England states to determine how we can best help in studying the transmission needs of the future grid, including offshore wind," Kakley said.
Massachusetts regulators had also previously considered a solicitation for the transmission component of their offshore wind buildout, though it was temporarily rejected due to facts such as cost. However, New Jersey's offshore wind goal is much larger than Massachusetts, which could create other cost benefits in the process, said Joseph DeLosa, manager of regulatory affairs at the BPU.
"Today's announcement comes with no conclusion as to whether the cost necessarily would be beneficial," DeLosa said.
