NJEDA Board Approves Orsted Sublease at New Jersey Wind Port

Source: www.gulfoilandgas.com 7/28/2023, Location: North America

The New Jersey Economic Development Authority (NJEDA) Board on Wednesday approved the Authority entering into development and sublease agreements with Ørsted Wind Power North America, LLC (Ørsted) for the sublease of up to 34 acres of property at the New Jersey Wind Port (NJWP). Ørsted will be the NJWP’s inaugural tenant and expects to create up to 200 jobs over its lease term. Orsted’s Ocean Wind 1 project is expected to create over 15,000 jobs over its 25-year operational life.

“The Board’s approval serves as another major step forward in achieving Governor Murphy’s 11 GW offshore wind target, and cements New Jersey’s reputation as a national leader in offshore wind,” said NJEDA Chief Executive Officer Tim Sullivan. “Ørsted’s decision to marshal its Ocean Wind 1 project from the New Jersey Wind Port will create 200 jobs that would otherwise have gone to other states, and is the first of many projects that will use the Port in the years and decades ahead that will create jobs for our children, further our clean energy goals, and ensure a more resilient environment and economy. I appreciate the men and women in organized labor who have invested over 250,000 hours thus far in the construction of the Wind Port and look forward to our continued partnership as we work towards its completion.”

“We are pleased to help the state achieve its clean energy goals and are proud to be the New Jersey Wind Port’s inaugural tenant, creating clean energy jobs and economic development opportunities,” said Maddy Urbish, Head of Government Affairs and Market Strategy, NJ, Ørsted. “With onshore construction beginning this fall and offshore construction starting next year, Ocean Wind 1 looks forward to providing reliable offshore wind energy to New Jersey and the region when complete.”

“There are immense economic, workforce development, and clean energy benefits anticipated to come with offshore wind development,” said State Senator Bob Smith (D-Middlesex). “Every step forward we make validates the hard work that the Legislature and the Murphy Administration have undertaken to make the State an attractive partner for offshore wind developers.”

“I look forward to this project continuing to advance and become the much-needed economic stimulus for South Jersey,” said Dan Cosner, Business Manager and Financial Secretary of Electrical Workers Local Union 351. “This will be a catalyst for the men and women of the South Jersey building trades, which in turn will help grow the local economy with the union wages that are being paid. I am very grateful for all those who made this a reality and continue to make sure this worthwhile project stays on track.”

Ørsted will sublease up to 34 acres of property at the Port for up to two years. Assuming a 24-month sublease term, total rent paid by Ørsted is estimated at over $25 million, representing a strong financial result for New Jersey taxpayers.

Importantly, the agreement with Ørsted includes a mechanism for shared berth use, preserving the NJWP’s ability to attract manufacturing tenants who require access to purpose-built wharves to ship out completed components.

The NJWP, once complete, will be the first and largest facility of its kind in the U.S. With a shortfall in fit-for-purpose port capacity in the U.S, the NJWP is expected to support offshore wind projects up and down the U.S East Coast including serving as a regional hub for turbine component manufacturing. At over 220 acres, the port can accommodate multiple Tier 1 component manufacturers, such as blades, nacelles, towers, and cables.

The NJEDA first issued a Notice to sublease in November 2020 and Ørsted submitted a non-binding offer in December of that year. The two parties executed a Letter of Intent (LOI) in April 2022 and have since been negotiating final terms. The property being subleased to Orsted is owned by PSEG Nuclear and is being leased by NJEDA from PSEG Nuclear on a 78-year basis.

Earlier this month, Governor Murphy signed legislation allowing Ørsted to access federal tax credits that will enable them to complete Ocean Wind 1, the first of two energy projects the developer plans in New Jersey.

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