Wind industry deals with blowback from Orsted scrapping 2 wind power projects in New Jersey
Wind energy developer Orsted is writing off $4 billion, due largely to the cancellation of two large offshore wind projects in New Jersey whose financial challenges mirror those facing the nascent industry
ATLANTIC CITY, N.J. — Wind energy developer Orsted is writing off $4 billion, due largely to the cancellation of two large offshore wind projects in New Jersey whose financial challenges mirror those facing the nascent industry.
It added fresh uncertainty to an industry seen by supporters as a way to help end the burning of planet-warming fossil fuels, but derided by opponents as inherently unworkable without massive financial subsidies.
The Danish company said Tuesday night it is scrapping its Ocean Wind I and II projects off the coast of southern New Jersey due to problems with supply chains, higher interest rates, and a failure to obtain the amount of tax credits the company wanted.
“These are obviously some very tough decisions,” Mads Nipper, Orsted's CEO, said on an earnings conference call Wednesday.
He said the company, the world's largest offshore wind developer, decided “to de-risk the most painful part of our portfolio, and that is the U.S.”
That statement went straight to the heart about concerns over the financial viability of the offshore wind industry in the northeastern U.S., which is in its infancy but has extensive plans from New England to the Carolinas.
Some projects already have been canceled, and many offshore wind developers are seeking better terms from governments with whom they have already contracted. New York rejected such a request two weeks ago.
New Jersey approved a tax break for Orsted in July, letting it keep federal tax credits that otherwise would have gone to ratepayers.
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