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Danish wind energy developer, Orsted, has decided to cancel two large offshore wind projects that were supposed to be built in New Jersey due to major financial challenges. Orsted stated that the reason it decided to call off the Ocean Wind I and II projects is due to “problems with supply chains, higher interest rates, and a failure to obtain the amount of tax credits the company wanted” (Associated Press, 2023). The statement calls to attention the “financial viability of the offshore wind industry in the northeastern U.S.” which were supposed to span from the New England region down to the Carolinas (Associated Press, 2023). Orsted isn’t the only company pulling out of wind energy projects, other projects have already been cancelled and other offshore wind developers are requesting better terms from the governments they have already contracted. 

According to Louis Knight, an analyst at a research firm called Third Bridge, the biggest determining factor for these types of projects “ultimately come down to economics, so higher costs and lower power prices are working against offshore wind” (Associated Press, 2023). These projects face high interest rates which add onto the financial costs that are more expensive than other ways to develop power, such as solar and natural gas. However, the biggest appeal of offshore wind is due to the fact that it is not part of the fossil fuel business. Members from 40 different environmental, labor, and community groups in New Jersey supported the offshore wind projects professed that “The urgency to transition to clean, renewable energy is an irreversible reality … In a world of warming temperatures and extreme weather in likely the hottest year on record, maintaining the status quo of fossil fuel generation is not an option as the cost of climate inaction is undeniably high” (Associated Press, 2023).

On the flip side, some resident groups from New Jersey opposed the projects due to aesthetic concerns that they did not want to see the ocean “dotted with wind turbines” (Associated Press, 2023). Other groups argued that the projects would take billions of dollars in subsidies and tax breaks to fund. Moreover, Republican representative Jeff Van Drew expressed his worries that the wind farms would damage the environment, the economy, and electric consumers. 

Although the wind projects in New Jersey have been cancelled, Orsted still is proceeding with its Revolution Wind Project in Rhode Island and Connecticut. Additionally, another energy company called Dominion Energy received approval of plans to build 176 wind turbines off the coast of Virginia Beach. Despite the setback in the New Jersey wind projects from Orsted, New Jersey still has other offshore wind projects that are in varying stages of development, including projects by Atlantic Shores. The continuation of other wind projects has pro-wind groups hopeful for the future of the industry.

Source: https://www.usnews.com/news/business/articles/2023-11-01/wind-industry-deals-with-blowback-from-orsted-scrapping-2-wind-power-projects-in-new-jersey