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NJ BPU rejects EDF Renewables' Nautilus Offshore Wind Project

The New Jersey Board of Public Utilities rejected EDF Renewable Energy Inc. and Fishermen's Energy of New Jersey LLC 's application to approve the Nautilus Offshore Wind Project (FERN Blueribbon). The board, or BPU, also authorized a system of offshore wind renewable energy certificates as the state looks to ensure that projects fulfilling Gov. Phil Murphy's clean energy agenda will bring revenues back to ratepayers.

In a Dec. 18 meeting, the BPU denied the application for the 25-MW pilot project, writing that the price quoted by Nautilus was too high and would present "an unacceptable burden for the state's ratepayers." The board also noted that the project did not demonstrate the economic and environmental benefits required under New Jersey's Offshore Wind Economic Development Act for the state to commit ratepayer funds.

Instead, the BPU will turn its attention to larger, utility-scale projects to meet Murphy's 3,500-MW offshore wind target by 2050. During the meeting, the board unanimously voted to adopt the RECs to fund the state's offshore wind program, while the board awaits applications for its 1,100-MW offshore wind tender to come in through Dec. 28.

"Unfortunately, the Nautilus demonstration project did not meet the net economic benefits standard as required by [law], and the Board voted down the application," BPU President Joseph L. Fiordaliso said in a statement. "We look forward to reviewing the applications for 1,100 MW of offshore wind and anticipate greater net benefits with larger-scale projects."

High cost, small output

This is the second time that the BPU has turned down the demonstration project, after the offshore wind facility was originally proposed in 2009. The project had qualified for funding from the U.S. Department of Energy, but the DOE withdrew the funding in January 2017 after the developer missed a deadline to find a buyer for its electricity. EDF Renewables revealed in April 2018 that it would acquire the long-delayed project, seeing Nautilus as an opportunity to test the state's readiness for offshore wind at a more manageable scale.

David Dismukes, a Louisiana-based consultant hired by the New Jersey Division of Rate Counsel to advise the BPU on offshore wind, testified on Oct. 2 that the BPU should reject the pilot project because its high costs and small capacity size would not help promote "the quick movement to large-scale [offshore wind] project development." The state's Rate Counsel concurred with Dismukes in a Dec. 4 letter to the BPU, saying that any benefits from the project would be negligible given Murphy's 3,500-MW offshore wind target. Environmental groups, concerned about the project's potential environmental effects, applauded the BPU's decision to nix the project.

A spokesperson for EDF Renewables did not indicate whether the company will cancel the project or try to a third attempt at approval. In an email, the company called the BPU's decision "disappointing to say the least" and said that the rejection will delay the state's ability to establish an offshore wind supply chain and a well-trained workforce.