Offshore wind developer Ørsted plans to help Germany’s EEW locate a factory for steel foundations in Paulsboro, New Jersey, in what would be one of the first major wins for the nascent U.S. offshore wind manufacturing sector.

Two weeks ago Denmark’s Ørsted won New Jersey’s first offshore wind solicitation with a 1.1-gigawatt project known as Ocean Wind, now the largest offshore wind project with a development deal with a U.S. state.

As part of its winning bid, Ørsted informed state officials of a memorandum of understanding with EEW to help establish a factory for monopile foundation pieces in Paulsboro, regulatory documents show.

Paulsboro is located just downriver from Philadelphia on New Jersey’s side of the Delaware River, and is widely seen as a leading contender for an early U.S. offshore wind factory.

Ørsted indicated to New Jersey officials that the Paulsboro production facility could be expanded as the U.S. offshore wind market takes off, potentially drawing a cluster of companies in the supply chain to the Garden State.

An Ørsted spokesperson confirmed the MOU to Greentech Media. Further details were unavailable ahead of the holiday in the U.S.

Additionally, Ørsted plans to locate its construction logistics base, foundation and transition-piece staging port, and its operations and maintenance port in New Jersey.

Ocean Wind is due for completion in 2024, and will generate enough power for about half a million homes from 15 miles off the Atlantic City coast. The project is also backed by New Jersey utility PSEG.

Welcome to Paulsboro

Detailed plans for the factory in Paulsboro have not been revealed, and plans can change. Still, Ørsted’s arrangement with EEW is the clearest sign yet that the offshore wind market will deliver the manufacturing jobs it has promised to East Coast states, even as many components are imported from Europe in the industry's early years.

Foundations are one of the largest parts of an offshore wind project, both physically and in terms of the capex required. Fabricating and installing foundations accounts for around one-quarter of the cost of a typical offshore wind farm, second only to the turbines themselves.

Ørsted has not disclosed a turbine supplier for Ocean Wind; MHI Vestas won the huge contract for Vineyard Wind’s 800-megawatt project off Massachusetts.

The Paulsboro Marine Terminal opened several years ago, becoming the first major port built along the Delaware River in half a century. The terminal is operated by the South Jersey Port Corporation, a quasi-state agency under the control of the governor, and reportedly benefited from $200 million of public investment.

Ørsted has been thinking about helping to bring EEW over to the U.S. for a while. The two companies, long partners in the European market, had plans to establish a production facility in Massachusetts if Ørsted’s Bay State project secured a contract there. However, rival developer Vineyard Wind won that procurement.

Eighty-year-old EEW is among the world’s largest producers of specialized welded steel pipes, used across a variety of industries, from offshore oil and gas to civil construction.

EEW diversified into the European offshore wind market a decade ago, and is now a leading supplier of the two main types of foundations used to anchor turbines to the seabed: monopiles and jackets. The privately owned company claims 2,000 employees and production facilities around the world, though none in the U.S.

EEW’s offshore wind-focused factory in Rostock, along Germany’s Baltic Sea coast, claims more than 500 employees, and produces foundation components weighing up to 1,500 tons, according to the company’s website.

Dominion's Virginia project enters construction

Despite having just 30 megawatts of installed capacity, the U.S. offshore wind market continues to gain momentum at a speed few thought possible just a few years ago, with New York recently confirming a nation-leading 9-gigawatt target for 2035.

Earlier this week Dominion Energy began construction at what is likely to become the second U.S. offshore wind farm, a two-turbine demonstration project off the coast of Virginia that is being built by Ørsted and is due online next year.

The Coastal Virginia Offshore Wind project represents the beginning of Dominion’s planned $1.1 billion investment program for offshore wind through 2023, sitting next to a 2-gigawatt development zone that Dominion can tap next.

While other U.S. utiltiies are invested in offshore wind projects, including Avangrid and Eversource Energy, Dominion is the largest.