Offshore wind developer kills two New Jersey projects

Ørsted, the Danish company behind two major offshore wind projects off the coast of New Jersey, announced Tuesday night it is killing both projects, citing supply chain challenges and rising interest rates.

Ørsted’s decision is a major blow to what had been the centerpiece of Gov. Phil Murphy’s clean energy agenda. Murphy called the move “outrageous” and said his administration would “take all necessary steps” to ensure the company honors its obligations.

The news comes less than a week before Election Day, when all 120 seats in the Legislature are on the ballot. New Jersey Republicans, who are trying to take back control of both chambers from Democrats, have trashed offshore wind as a boondoggle.

Mads Nipper, Ørsted’s CEO, said in a statement that the company believes the United States needs offshore wind to reduce its 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, and we will now assess the best way to preserve value while we cease development of the projects,” he said.

Ørsted, the world’s largest developer of wind energy, had warned that it might abandon one or both of New Jersey’s projects, called Ocean Wind I and II, saying they needed more financial subsidies. Earlier this year, New Jersey lawmakers passed a bill allowing the company to keep tax incentives that had been intended for ratepayers, a move offshore wind critics blasted as “corporate welfare.”

Murphy called Tuesday’s news a “setback” for offshore wind, but said the state has seen a lot of interest among bidders in a third offshore wind project.

“I remain committed to ensuring that New Jersey becomes a global leader in offshore wind — which is critical to our economic, environmental, and clean energy future,” he said.

Republicans, meanwhile, are crowing.

“Ørsted’s decision today confirms that Republicans were right when we said this was too much, too fast, and too costly. Their financial challenges were glaringly obvious, yet Democrats ignored the warning signs to rush through Governor Murphy’s extreme energy master plan without any due diligence. This is just another example of how Governor Murphy’s outrageous energy master plan is coming back to hurt New Jersey taxpayers,” said state Sen. Tony Bucco (R-Morris), his chamber’s minority leader.