The state had offered a $19 million grant - a fraction of the cost of building a wind farm - as part a push to generate 20 percent of the state's energy from renewable sources by 2020.
The company says they only applied for $4 million of the grant money, which will go toward starting process of building a windfarm, such as getting permits and environmental impact studies, a PSEG spokeswoman said.
The company said they intend to build the facility and explore wind energy, but that many factors, from the studies to financing, will determine where and when the facility is actually built. PSEG officials estimate the actual cost of building the wind farm pilot project at around $1 billion.
The current proposal calls for 96 wind turbines to be located on a rectangular grid 16 to 20 miles off the coast of Cape May and Atlantic counties. The company says the facility will barely be visible from the shore and may start generating energy by 2012.
Nelson Garcez, vice president of PSEG Renewable Generation, said the grant was a first step in exploring the potential for wind energy.
"This places New Jersey among the leaders in the U.S. in developing off shore wind energy," he said. "It has tremendous potential to create clean energy and hundreds of green jobs for the state."
Opponents of offshore wind farms are concerned about an unsightly horizon, obstacles to marine traffic and the potential environmental impact on seabeds and ocean ecology.
No offshore wind farms have been built in the United States, although they've been proposed off the coast of Delaware, Rhode Island, New York and in the Gulf of Mexico. There are several in Europe, where the technology is gaining popularity.
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