Danish energy developer Orsted said Tuesday night it is scrapping two large offshore wind power projects off the coast of New Jersey, adding uncertainty to a nascent industry the Biden administration and many state governments are counting on to help transition away from the burning of planet-warming fossil fuels. The company said it is canceling its Ocean Wind I and II projects in southern New Jersey, citing supply chain issues and rising interest rates. The company said it would move forward with its Revolution Wind project in Connecticut and Rhode Island, reports the AP.
Orsted, the world's largest wind energy developer, warned in August that it might walk away from one or both of its New Jersey projects, which it said needed more financial subsidies beyond a tax break approved by the state that would have let the company keep as much as $1 million in tax credits that otherwise would have had to be returned to electricity ratepayers. At the time, New Jersey Gov. Phil Murphy, who is pushing to make his state the East Coast hub of offshore wind, said the break was necessary to save the jobs and economic activity Orsted would have brought to the state.
Murphy, who took significant political heat for the tax break, reacted angrily to Orsted's decision to walk away from New Jersey, calling it "outrageous" and noting that "as recently as several weeks ago, the company made public statements regarding the viability and progress of the Ocean Wind I project." Jeff Tittel, former New Jersey chapter president of the Sierra Club, called Orsted's decision "a devastating setback for offshore wind in New Jersey" and accused Orsted of long mishandling the project. "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."
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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 abide by the terms of their deals with the state. A handful of other offshore wind projects have been canceled, including the Park City Wind project off Massachusetts. 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.
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