The New Jersey Board of Public Utilities (BPU) chose Ørsted in the state's first offshore wind solicitation, paving the way for the developer to negotiate the 20-year offshore wind renewable energy certificate (OREC) for the project.
Subject to Ørsted’s final investment decision, Ocean Wind is expected online by 2024.
It is in line to be the first 1GW-plus offshore wind farm in the US, and will count towards New Jersey’s target of 3.5GW of offshore wind capacity being operational by 2030.
"Today’s announcement firmly establishes a fast-growing global industry in New Jersey, which will create jobs and supply chain in the state," said Thomas Brostrøm, CEO of Ørsted’s US business.
Ørsted also announced it plans to set up an operations and maintenance base in Atlantic City, New Jersey, which will provide permanent, high-skilled jobs for the lifespan of the project.
The Danish developer beat rival bids from Atlantic Shores Offshore Wind — a partnership between EDF Renewables and Shell New Energies — and Equinor to secure the entire 1.1GW capacity available.
It offered a levelised price of $116.82/MWh (with a first-year OREC price of $98.10/MWh), of which ratepayers would actually pay $46.46/MWh, the BPU said.
"Ørsted provides the best chance of successful development due to its depth of knowledge, as well as global and regional experience and advanced stage of planning," the board added.
New Jersey has two further tender rounds — each for 1.2GW — to follow as it reaches its 3.5GW by 2030 target.
"The award of this long-term power purchase agreement means that Ørsted can now move ahead aggressively to develop the US supply chain and start the process of ordering the towers, blades, foundations, cables, and hundreds of other parts and components that will be assembled into a massive wind farm," said Liz Burdock, CEO of lobbying group, Business Network for Offshore Wind.
In a research note prior to the tender award, senior research associate at Macquarie, Keegan Kruger, said he believed Ørsted’s acquisition of US developer Deepwater Wind and its strengthened partnership with utility Eversource Energy would give it the edge in the first auction.
He explained that these factors would enable the developer to leverage domestic market experience to ensure its bid was competitive.