Saving Seafood

Orsted wants out of $300M forfeiture for scrapped New Jersey offshore wind farms

November 7, 2023 — Offshore wind power company Orsted is trying to get out of a $300 million guarantee it agreed to pay New Jersey in the event it failed to build its first wind farm off the state’s coast.

Last Tuesday, the Danish firm scrapped its Ocean Wind I and II projects in southern New Jersey, saying the projects were no longer financially feasible. The company cited supply chain issues, inflation and a failure to gain enough government tax credits.

The next day, Orsted wrote to the New Jersey Board of Public Utilities, saying it was withdrawing from an agreement it signed with the state under which it would forfeit the money if it did not build Ocean Wind I.

Read the full article at the Associated Press

Offshore wind projects face economic storm. Cancellations jeopardize Biden clean energy goals

November 6, 2023 — The cancellation of two large offshore wind projects in New Jersey is the latest in a series of setbacks for the nascent U.S. offshore wind industry, jeopardizing the Biden administration’s goals of powering 10 million homes from towering ocean-based turbines by 2030 and establishing a carbon-free electric grid five years later.

The Danish wind energy developer Ørsted said this week it’s scrapping its Ocean Wind I and II projects off 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. Together, the projects were supposed to deliver over 2.2 gigawatts of power.

The news comes after developers in New England canceled power contacts for three projects that would have provided another 3.2 gigawatts of wind power to Massachusetts and Connecticut. They said their projects were no longer financially feasible.

Read the full article at the Associated Press

Phil Murphy’s New Jersey Wind Flop

November 6, 2023 — Phil Murphy huffed and he puffed, and a giant wind boondoggle blew the New Jersey Governor down. That’s the story of another failed green-energy project, as the follies keep being exposed.

The renewable energy firm Ørsted last week backed out of two megaprojects along the Jersey shore that it started planning in 2019. With his eye on support from the climate lobby for a White House run, Mr. Murphy courted the developments, which were meant to provide electricity for hundreds of thousands of homes. The company says cost overruns have made them impossible, and it wrote off $4 billion for the first nine months of this year.

Mr. Murphy fumed in public, saying the cancellation casts doubt on Ørsted’s “credibility and competence.” The Danish firm blames its withdrawal on rising interest rates and component costs, but it has said little about what made the New Jersey project uniquely impractical. At least for now, the company is moving ahead with wind farms in New England and Maryland.

Read the full article at the Wall Street Journal

NEW YORK: New Jersey’s offshore wind loss is New York’s burden to save Biden’s climate agenda

November 6, 2023 — In the long-running sibling rivalry between New Jersey and New York, the Garden State finally thought it had the upper hand.

The state, led by Democratic Gov. Phil Murphy, decided it could become one of the greenest in the country with offshore wind as its main pillar. But Murphy’s ambitious plans to make New Jersey’s power supply carbon-free by 2035 collapsed days ago when the developer Ørsted canceled two of the state’s three offshore wind projects.

Now, if President Joe Biden ever wants to meet his energy goals for the nation, New York and other Northeastern states are going to have to pick up New Jersey’s slack. And New York — the bigger sibling, the one with more money, more power and more attention — is poised to snatch away factories and jobs that New Jersey hoped for.

“We’re certainly the state with the greatest ambition at this point,” said Fred Zalcman, director of the New York Offshore Wind Alliance, which advocates for the industry.

New York has a lot riding on the success of offshore wind too. New efforts to save or replace at-risk projects the state has already approved are even more important after the New Jersey projects evaporated.

Offshore wind has long been seen as an essential power source for densely populated coastal states to meet ambitious climate targets. Wind farms don’t have to compete with people for land and send power to waterfront cities.

Approving new wind farms became a sometimes-competitive cause célèbre for Democratic leaders who wanted to expand maritime ports, open new factories and create union jobs. It also became something of a zero sum game, even though they share the same coastal waters.

Read the full article at Politico

Ørsted pulls out of two big US offshore wind power projects

November 6, 2023 — Offshore wind developer Ørsted said it is pulling out of its Ocean Wind 1 and Ocean Wind 2 projects off the coast of the U.S. state of New Jersey.

Ørsted Group Executive Vice President and CEO Americas David Hardy cited escalated financial difficulties and supply chain issues for the move, after the Danish company’s board of directors announced the decision at the start of an earnings call.

Read the full article at SeafoodSource

As industry struggles, federal, state offshore wind goals could get tougher to meet

November 3, 2023 — Good news or bad news first? Because there was plenty of both this week for the fledgling U.S. offshore wind industry.

On Halloween, the Biden administration announced that the nation’s largest planned offshore wind development, Dominion Energy’s 2,600 megawatt Coastal Virginia Offshore Wind project, received its last major federal approval.

The same day, however, Danish wind giant Ørsted pulled the plug on a pair of projects (Ocean Wind 1 and 2) that were planned off the coast of New Jersey, citing climbing interest rates, inflation and “supply chain bottlenecks.” The news touched off a firestorm in New Jersey, which has set some of the most aggressive offshore wind goals in the country and gone to considerable lengths to plan the transmission upgrades needed to bring all that power ashore.

The same financial headwinds have many U.S.offshore wind developers looking to renegotiate deals as the costs of their projects climb. And it’s casting some doubt on whether states and the Biden administration will be able to hit their offshore wind targets on time.

Read the full article at the New Jersey Monitor

Offshore Wind Firm Cancels N.J. Projects, as Industry’s Prospects Dim

November 2, 2023 — Plans to build two wind farms off the coast of New Jersey were scrapped, the company behind them said on Wednesday, a blow to the state’s efforts to cut greenhouse gas emissions and the latest shakeout in the U.S. wind industry.

The move, which will force Orsted, a Danish company, to write off as much as $5.6 billion, will crimp the Biden administration’s plans to make the wind industry a critical component of plans to reduce greenhouse gas emissions. High inflation and soaring interest rates are making planned projects that looked like winners several years ago no longer profitable.

“The world has in many ways, from a macroeconomic and industry point of view, turned upside down,” Mads Nipper, Orsted’s chief executive, said on a call with reporters on Wednesday.

The two projects, known as Ocean Wind 1 and 2, were destined to provide green energy to New Jersey. They were strongly backed by the state’s governor, Phil Murphy, a Democrat with national ambitions who stresses his environmental credentials but who has lately drawn scorn for falling short in combating climate change. On Wednesday he suggested that Orsted was a dishonest broker and insisted that the “future of offshore wind” along the state’s 130-mile coastline remained strong.

Mr. Nipper said Orsted thought that losses on the New Jersey projects would rise over time, so “the only sensible thing is to draw a line in the sand.”

Overall, the Biden administration wants to install 30 gigawatts of wind power in the United States by 2030, and officials in New Jersey had been aiming to produce 11 gigawatts by 2040.

Read the full article at the New York Times

Offshore wind company cancels project in N.J. Now what?

October 2, 2023 — Danish global offshore wind developer Orsted’s abrupt announcement this week that it is abandoning both of its massive projects planned off the New Jersey coast is a stinging blow to Gov. Phil Murphy’s ambitious goal of addressing climate change that threatens the state’s coast.

The company’s announcement Tuesday night was akin to abruptly snatching away key pieces of the state’s renewable energy puzzle. As of Wednesday, it was unclear how leaders would fill that void.

However, one key piece does remain in place: Atlantic Shores, the largest single wind farm yet approved by the New Jersey Board of Public Utilities (BPU).

Orsted in its earnings statement cited economic headwinds as the reason.

“Macroeconomic factors have changed dramatically over a short period of time, with high inflation, rising interest rates, and supply chain bottlenecks impacting our long-term capital investments,” said David Hardy, group executive vice president and CEO Americas at Orsted. “As a result, we have no choice but to cease development of Ocean Wind 1 and Ocean Wind 2.”

Hardy said the company was disappointed and thanked Murphy and other state leaders who tried to kick-start the industry in the state, hoping to make it a hub for offshore wind in the Northeast.

‘Outrageous’

Murphy, however, was having none of it. His administration took significant political heat in backing recent legislation allowing Orsted to take federal renewable energy credits that initially state law allowed to go only to ratepayers.

“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 governor said in a statement. “As recently as several weeks ago, the company made public statements regarding the viability and progress of the Ocean Wind 1 project.”

Murphy said his administration is looking “to review all legal rights and remedies and to take all necessary steps to ensure that Orsted fully and immediately honors its obligations.”

State officials who backed offshore wind are “upset, frustrated, and disappointed,” said a senior administration official, who called Orsted’s decision a “setback” in the state’s aggressive goal of obtaining 100% clean energy by 2035. The official said the administration is proceeding with offshore wind because “it’s too important to our economic future. It’s too important for our environmental and energy needs.”

It could take time for the state to find, and approve, a new developer to replace the 2.2 gigawatts of energy that would have been generated by Orsted’s Ocean Wind 1 and 2 projects — enough to have powered about 1 million homes.

Read the full article at the Philadelphia Inquirer 

Offshore wind is stumbling. Can Biden save the industry?

November 2, 2023 — The Biden administration is facing increasing pressure to take action to bolster the offshore wind industry after a major project was canceled in New Jersey on Tuesday, although options appear limited to ease financial hurdles facing developers.

So far, the administration is reiterating that the industry will continue to grow and that President Joe Biden’s goals for 30 gigawatts of offshore wind by 2030 will be achieved, even as many states and analysts say otherwise.

“Biden’s offshore wind goals look impossible at this point of time,” said Chelsea Jean-Michel, a wind analyst with BloombergNEF, a research and analysis firm.

Read the full article at E&E News