Gov. Phil Murphy of New Jersey signed legislation Thursday that provides a tax break to Danish offshore wind producer Orsted. For the first of two energy projects it intends to build in the seas off the coast of New Jersey.
The financial assistance, according to the Democratic governor, is necessary to guarantee that offshore wind projects. Additionally, New Jersey rather than rival states get the employment they create.
Before the ink on the law had dried, he was under pressure from another offshore wind developer seeking similar aid.
Tax Break for Orsted’s Offshore Wind Farm to Mitigate Economic Challenges
The measure permits Orsted to preserve federal tax benefits that company would otherwise have had to pass on to New Jersey electricity customers. Last Monday, lawmakers barely passed the bill, stating that the aid is required to assist Orsted in dealing with inflation and the residual impacts of the COVID-19 epidemic.
Murphy said after the event at the Paulsboro Marine Terminal, where the enormous supporting structures for wind turbines, known as monopiles, are produced, “If we don’t figure out a solution, this doesn’t get done in New Jersey.” We are aware that there is a conflict in Europe, there is inflation, there are supply chain issues, and we are not the only country dealing with these issues. Either we pass this legislation and the local economy prospers. And any jobs related to it, or else it moves somewhere else.
The size of the tax exemption was not disclosed by the firm or by Democratic lawmakers. But Republican state senator Edward Durr estimated it to be close to $1 billion.
Financial Support for Atlantic Shores’ Offshore Wind Farm as Project Risks Mount
By warning that the project is “at risk” without further financial support from the government. Atlantic Shores stated earlier this week that it too seeks government assistance to establish its own offshore wind farm.
Regarding the proposal from Atlantic Shores, Murphy declared himself “open-minded”.
Shell New Energies US LLC and EDF-RE Offshore Development LLC collaborated on Atlantic Shores.
The U.S. Bureau of Ocean Energy Management gave Orsted’s Ocean Wind I project permission. In order too start building a wind farm 13 to 15 miles off the coast of Atlantic City and Ocean City the day before the measure was signed into law. Orsted stated that it anticipates having the necessary federal and state permissions in place by the second quarter of 2024.
This autumn, work is scheduled to start on the wind farm’s almost 100 wind turbines. It intends to supply 500,000 houses with adequate electricity to run them.
A second wind farm off the coast of New Jersey is also approved for construction by Orsted, however the regulatory procedure for that project has not advanced as far.