The wind farm in which PSEG is set to acquire an interest is expected to be commissioned in 2024.

Public Service Enterprise Group is looking to get back into offshore wind, and will enter into exclusive negotiations with rsted to acquire a one-quarter interest in its yet to be built 1,100-megawatt wind farm off Atlantic City.

The $1.6 billion Ocean Wind project is the first offshore wind farm approved in New Jersey. Located 15 miles off Atlantic City, it is projected to supply more than a half million homes with power. The wind farm is expected to be commissioned in 2024, subject to permitting and other factors.

The two companies announcement late in the day was a bit of a surprise, considering PSEG and rsted had previously disclosed the former had an option to buy an equity interest in the wind farm project this spring.

In a joint press release, the companies appeared to indicate the process of negotiations might be far along, although an rsted spokesman declined to confirm that this was the case.

Given PSEGs track record for success and history providing energy solutions for communities across the Mid-Atlantic region, we are thrilled at the prospect of having them join the Ocean Wind project, said Thomas Brostrm, president of rsted North America and CEO of rsted U.S. Offshore Wind.

rsted has emerged as the biggest force in the nascent offshore wind market in the United States, operating the first offshore wind facility in the country off Block Island in Rhode Island. It also has been awarded commitments to build more than 2,900 MW of capacity in six other projects along the Eastern Seaboard.

We are pleased about the opportunity to explore a partnership with rsted, a world leader in offshore wind development, and help New Jersey achieve its goal of carbon free generation by 2050, said Ralph LaRossa, president and chief operating officer of PSEG Power, a subsidiary of PSEG.

Offshore wind is a key, if not most crucial component of Gov. Phil Murphys goal of converting to a clean energy economy. By 2030, the administration wants to build 3,500 MW of offshore wind off the Jersey coast.

At one time, PSEG appeared poised to be a big player in the offshore wind sector, cementing a partnership more than a decade ago with developer Deepwater Wind, which rsted acquired a year ago. When former Gov. Chris Christies administration backed away from promoting offshore wind, PSEG seemed to steer away from the sector.

After the Deepwater acquisition, it was disclosed that PSEG had agreed to provide rsted with energy management services, which included allowing the Danish developer to lease land for use in its project development. The lease is expected to provide land around PSEGs three nuclear units in Salem County to assemble the huge turbines for the wind farms.

In a quarterly earnings call this spring, PSEG CEO Ralph Izzo talked more about the companys interest in building transmission for offshore wind, instead of developing the wind farms offshore. Nevertheless, PSEG, more than any other power company in the state, has embraced the Murphy administrations goal of transitioning to 100% clean energy by 2050 and has the financial resources to commit to that target.

The announcement also came on a day when rsted shares dropped 8% after the company announced long-term production values from its offshore wind farms may have miscalculated how much power they could produce.

Todays announcement is unrelated to our announcement updating our long-term financial targets, said Cam Stoker, a spokesman for rsted.

PSEG did not respond to calls for comment.

Clean energy advocates were not surprised by the announcement. This is the epitome of if you cant beat them, join them, said Doug OMalley, director of Environment New Jersey. This is a sign that offshore wind is no longer a niche market.

Paul Patterson, an energy analyst with Glenrock Associates who follows PSEG, however, cautioned PSEG will likely be very conservative in its investment in offshore wind. It is a lot different kettle of fish than building on land for wind energy, he said.

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PSEG Looks to Become Active Player in Offshore Wind Development - NJ Spotlight