By William O’Hearn, Business Network for Offshore Wind
Late last month, energy advocates filled a large meeting room in a downtown Philadelphia law firm for a discussion on offshore wind energy transmission from PJM Interconnection, the regional transmission organization (RTO) that runs the wholesale electricity market in several Mid-Atlantic states (including VA, MD, DE, and NJ).
A panel of experts, including Cynthia Holland, director of federal and regional policy for NJ BPU; University of Delaware professor Willett Kempton; Clint Plummer, head of U.S. market strategies and new projects for Ørsted; Theodore Paradise, senior vice president of transmission strategy and counsel at Anbaric; and Ken Seiler, PJM’s executive director of planning, agreed in general that offshore wind farms offer big potential for power production in the PJM area, but it will take a major extension of the grid to unlock that possibility.
Holland opened the session by pointing out that bids for New Jersey’s first solicitation of 1,100 MW have already been received, with a second 1,200-MW solicitation planned for summer 2020 and third scheduled for July 2022 to hit the goal of 3500 MW by 2030. She said that the first round of wind farms will likely involve developers managing the connections to the on-shore grid, though the BPU remains open to using shared or networked transmission systems for future projects
Plummer of Ørsted emphasized that developers must not be ‘stranded’ by delays to the offshore grid, and shared the story of problems with Germany’s segmented, backbone approach vs. the U.K.’s developer-controlled interconnection model. Paradise of Anbaric countered that Germany has since corrected its backbone model, and the U.S. is different than the U.K. because the U.S. has very limited locations for interconnections with offshore wind projects.
Paradise noted that having the offshore transmission backbone ready when wind farms are constructed can lower the overall risks of the project, involve less environmental impact, use fewer cables, and provide more system reliability (multiple paths from wind farm to shore). “Permitting can take significant time,” Paradise said, noting that securing those components ahead of time could be used as a “de-risking” tool. “It’s important you do it the right way.”
Seiler said the RTO sees significant potential and benefits to the grid in offshore wind, but it remains hesitant about building transmission without committed generation. (Note that PJM staff is working with stakeholders to examine this process in further detail in the RTO’s Merchant Transmission and Offshore Wind Task Force.) “We recognize the interest and we recognize the value of offshore wind,” he said. “‘Build it and they’ll come’—we aren’t sure that’s the best approach for integrating offshore wind with the existing grid.” So, it appears the offshore wind industry may have another ‘chicken and egg’ situation, not unlike what we have seen with ports development. Here again, the industry will need to find a way to encourage investment to pay for grid infrastructure so that it is ready when offshore wind farms are prepared to start generating power.