Dive Brief:
- Ørsted U.S. Offshore Wind and Public Service Enterprise Group (PSEG) announced on Tuesday the beginning of exclusive negotiations for the utility to become an equity investor in the New Jersey offshore Ocean Wind project.
- PSEG would acquire 25% of Ørsted's 1,100 MW project that earned a winning bid this June in the first of three solicitations by the state to secure 3.5 GW of offshore wind by 2030. The utility was already connected to the project, having pledged its energy management services and leased land for its development.
- The project is expected online in 2024 and remains subject to permitting and final investment decisions. PSEG announced in its second quarter earnings this year that it expected "to make a decision regarding an equity investment" in the second half of 2019.
Dive Insight:
Ørsted is exclusively considering PSEG as a partner on Ocean Wind at this time, and has experience partnering with other U.S. utilities in offshore wind joint ventures.
Ørsted joined Dominion Energy in Virginia for the development of a 12 MW pilot project in federal waters as well as the largest single offshore wind project in the country, at 2,600 MW. This makes Ocean Wind the second largest project announced in the U.S.
The developer is also focused on infrastructure development in Baltimore and New Jersey to support offshore wind projects.
Offshore wind would be one component of PSEG's goal to achieve carbon-free generation by 2050.
PSEG announced in July that it's on track to cut most of its coal emissions by 2046. In September 2018, it announced a $4 billion clean energy plan aimed at helping meet New Jersey's climate goals while also reducing customer bills. The utility wants to spend $2.8 billion on energy efficiency, and has plans to grow energy storage capabilities.
PSEG is considering clean energy investments, "including offshore wind opportunities," according to its 10-Q filing in June.
"At this point we are just entering into negotiations, so it's too premature to come out with any sort of timeline for a potential deal," Ørsted spokesperson Cam Stoker told Utility Dive via email.
