NEW YORK CITY — Atlantic Grid Development LLC, the company planning an undersea power-transmission line backed by Google Inc. (GOOG), is shifting its goal to moving electricity across New Jersey instead of connecting offshore wind farms.
Grid operator PJM Interconnection LLC and New Jersey’s Economic Development Authority are evaluating the project’s potential to reduce energy costs in the state, Robert Mitchell, chief executive officer of the developer’s Atlantic Wind Connection project, said yesterday in an interview.
The project was originally conceived as the backbone for an anticipated network of wind farms off the U.S. East Coast that’s still years away. Using the transmission line to move power from southern New Jersey to the northern part of the state where energy prices are higher is a goal that’s easier to achieve, Mitchell said. There are no U.S. offshore wind farms in operation or under construction.
“Without wind, we discovered that the problems can be solved by this line,” Mitchell said. “This has been a long-standing issue, probably 25 to 30 years, the lack of adequate transmission in New Jersey.”
Construction on the New Jersey Power Link, the proposed $1.8 billion first phase of the Atlantic Wind Connection, may begin as early as 2016 and it could be in service by 2020, he said. The company introduced Oct. 21 an online portal for businesses to bid for work constructing the line, which will stretch the length of the state and carry 3,000 megawatts of electricity.
New Jersey is the most densely populated U.S. state, making new transmission lines difficult to permit, Mitchell said. It has the sixth highest electricity rates in the nation.
State officials questioned the value of building an undersea cable instead of one on land.
“For us, it’s generally about cost effectiveness,” said New Jersey Rate Counsel Director Stefanie Brand. “It’s hard for us to support a project like this” because there are less expensive options.
New Jersey Governor Chris Christie, who is up for re-election next month and has made cutting electricity costs his top energy policy priority, is “not ready to support it,” spokesman Michael Drewniak said yesterday in an interview.
The U.S. Interior Department supports the undersea project.
“There has been interest in the Atlantic Wind Connection, developing a backbone, and we certainly stand ready to be a partner,” Interior Secretary Sarah Jewell in an Oct. 22 speech at the American Wind Energy Association’s Offshore Windpower 2013 conference in Providence, Rhode Island.
The undersea cable may eventually serve offshore wind projects and subsequent phases of the Atlantic Wind Connection may connect Delaware, Maryland and Virginia.
In addition to Google, Marubeni Corp. (8002) and Elia System Operator have invested in the project and the company hired Bechtel Group Inc. in January as the main contractor and Alstom SA (ALO) as a technical adviser.
Copyright 2013 Bloomberg
Lead image: Offshore wind via Shutterstock