Dong Energy A/S, the world’s largest offshore-wind developer, agreed to acquire a lease for a site off the coast of New Jersey with more than 1,000 MW of potential capacity, marking the company’s second push into U.S. waters.
Dong plans to take over the 160,480-acre lease from RES Americas Development Inc., the Fredericia, Denmark-based company said in a statement Tuesday. RES Americas won the lease in a November auction held by the U.S. Bureau of Ocean Energy Management, which must approve the transfer.
Dong is moving into an area where offshore wind has languished. The state’s Board of Public Utilities has rejected Fishermen’s Energy LLC’s proposal for a 25-MW pilot project, saying the power would be too expensive for consumers. Building a bigger facility and paying for construction itself will address that, according to Thomas Brostrom, Dong’s general manager of North America.
“We are looking at a large-scale project here,” he said in an interview Tuesday. “You have a lot of benefits from that.”
The New Jersey lease area is 10 nautical miles off shore, south of Atlantic City, with water depths of about 80 feet (24 meters). The conditions are similar to those Dong currently works with in North-Western Europe, the company said.
Last year Dong acquired a site south of Martha’s Vineyard, Mass., in another deal with RES. Both projects would require state and federal permits. It will be at least four years before construction can begin, and it’s too early to estimate the cost of either project, Brostrom said.
Dong, which pioneered the world’s first offshore wind farm in 1991, has projects with more than 2,000 MW of capacity in operation and another 1,000 MW under construction. The company opened its first U.S. office last year in Boston and is scouting the East Coast for other locations to build, Brostrom said.
“To build an industry you need volume,” he said. “We see a lot of potential in the American market.”
© 2016 Bloomberg
Lead image: Dong’s Anholt offshore wind farm. Credit: Siemens.