ATLANTIC CITY, N.J. – Danish power developer Orsted stated Tuesday evening it’s scrapping two massive offshore wind power projects off the coast of New Jersey, including uncertainty to a nascent trade the Biden management and plenty of state governments are counting directly to lend a hand transition clear of the burning of planet-warming fossil fuels.
The corporate stated it’s canceling its Ocean Wind I and II projects in southern New Jersey, citing supply chain issues and emerging rates of interest.
Orsted CEO Mads Nipper stated in a observation the corporate used to be dissatisfied to be halting the projects as it believes the United States wishes wind power to cut back carbon emissions.
“However, the significant adverse developments from supply chain challenges, leading to delays in the project schedule, and rising interest rates have led us to this decision,” Nipper stated.
Orsted stands to lose a $100 million ensure it posted with New Jersey previous this month that it could construct Ocean Wind I via the top of 2025. That cash might be returned to ratepayers.
The corporate stated it could transfer ahead with its Revolution Wind undertaking in Connecticut and Rhode Island.
Orsted, the sector’s biggest wind power developer, warned in August that it would stroll clear of one or either one of its New Jersey projects, which it stated wanted extra monetary subsidies past a tax damage authorized via the state that might have let the corporate stay up to $1 million in tax credit that another way would have needed to be returned to electrical energy ratepayers.
At the time, New Jersey Gov. Phil Murphy, who’s pushing to make his state the East Coast hub of offshore wind, stated the damage used to be important to avoid wasting the roles and financial process Orsted would have delivered to the state.
Murphy, who took important political warmth for the tax damage, reacted angrily to Orsted’s choice to stroll clear of New Jersey.
“Today’s decision by Orsted to abandon its commitments to New Jersey is outrageous and calls into question the company’s credibility and competence,” the Democratic governor said. “As recently as several weeks ago, the company made public statements regarding the viability and progress of the Ocean Wind I project.”
He noted that Orsted was required to put up an additional $200 million to benefit the state’s offshore wind industry, and said he would make sure the company abides by that obligation.
Murphy said Orsted was facing the same supply chain, inflation and other challenges that competitors in the offshore wind industry face. But he insisted the industry will succeed in New Jersey, noting that the state will solicit yet another round of project proposals soon.
The decision was the latest in a series of setbacks for the offshore wind industry in the northeast. Two weeks ago, New York regulators rejected a request from companies for larger subsidies to complete large-scale wind, solar and offshore wind projects, saying the companies were expected to to abide by the terms of their deals with the state.
A handful of other offshore wind projects have been canceled. They include the Park City Wind project off the coast of Massachusetts. Avangrid, a subsidiary of Spanish utility company Iberdrola, and several Connecticut utilities scrapped a long-term power purchase agreement.
Offshore wind in general, and particularly in New Jersey, has faced growing opposition, both politically — mostly from Republicans — and from residents concerned about impacts on the environment, increased costs and the impairment of views of the ocean horizon.
Jeff Tittel, a longtime environmentalist and former New Jersey chapter president of the Sierra Club, called Orsted’s decision “a devastating setback for offshore wind in New Jersey.”
“These projects have been mishandled from the beginning by Orsted,” he said. “They didn’t listen to the public and did not understand our needs or politics. They thought they would get a blank check. Their arrogance is why these projects failed.”
Still projects in some places are moving forward.
In Virginia, a utility’s plans for an enormous wind farm off that state’s coast gained key federal approval Tuesday. Dominion Energy received a favorable “record of decision” from federal regulators who reviewed the potential environmental impact of its plan to build 176 turbines in the Atlantic, more than 20 miles (32 kilometers) off Virginia Beach.
Dominion said its project will be the largest offshore wind farm under development in the U.S. and eventually expected to generate enough electricity to power up to 660,000 homes after completion of construction by late 2026.
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