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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

NEW JERSEY: Ørsted pulls plug on New Jersey offshore wind projects

November 2, 2023 — New Jersey’s leaders are blasting a decision by a Danish energy company to back away from two major offshore wind projects off the state’s coastline.

In a statement issued Tuesday, Ørsted announced that it is scrapping two large offshore wind power projects off the coast of New Jersey, delivering a major blow to the state’s clean energy plans and Gov. Phil Murphy’s push to put the coastal state at the forefront of the nation’s nascent offshore wind industry.

Murphy ripped the company’s decision to walk away from the projects, calling it “outrageous” and saying it “calls into question the company’s credibility and competence.”

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

Murphy said a provision of the company’s development agreement requires it to pay New Jersey $300 million to support the offshore wind sector if the projects don’t proceed.

“I have directed my administration to review all legal rights and remedies and to take all necessary steps to ensure that Orsted fully and immediately honors its obligations,” he said.

Read the full article at the Center Square

U.S. offshore wind sector ‘fundamentally broken’ – BP exec

November 1, 2023 — BP’s renewables boss said on Wednesday the U.S. offshore wind industry is “fundamentally broken” as BP and its partner Equinor (EQNR.OL) study options to develop huge projects off the coast of New York after writing down $840 million of their value.

The offshore wind industry, one of the fastest growing energy sectors, has recently suffered a string of major setbacks due to equipment reliability issues, supply chain problems and sharp cost increases.

Orsted (ORSTED.CO), the world’s largest offshore wind developer, on Wednesday flagged writedowns of up to $5.6 billion after halting the development of U.S. offshore wind projects.

Anja-Isabel Dotzenrath, BP’s head of gas and low carbon, said that problems in the United States included permitting, the time lag between signing power purchase agreements and projects being built and a lack of inflationary adjustment mechanisms

Read the full article at Reuters

Orsted hit by up to $5.6 billion impairment on halted US projects

November 1, 2023 — Renewable energy firm Orsted (ORSTED.CO) on Wednesday halted the development of two U.S. offshore wind projects and said related impairments had surged above $5 billion, as the industry grapples with supply chain delays and higher costs.

Orsted, the world’s largest offshore wind developer, said it would stop developing its 2,248-megawatt (MW) Ocean Wind 1 and 2 projects in New Jersey. Related impairments could amount to as much as 39.4 billion Danish crowns ($5.58 billion).

Its stock plunged as much as 22% to a six year low of 265 crowns.

The offshore wind industry has found itself in a perfect storm of rising inflation, interest rate hikes and supply chain delays, casting doubt on plans by U.S. President Joe Biden and several states to use offshore wind to replace fossil fuels in energy production to fight climate change.

On Tuesday, energy major BP (BP.L) booked a third-quarter writedown of $540 million on wind projects after officials in New York state rejected a request for better terms to reflect what BP called “inflationary pressures and permitting delays”.

Read the full article at Reuters

NEW JERSEY: Orsted scraps 2 offshore wind power projects in New Jersey, citing supply chain issues

November 1, 2023 — 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.

Orsted CEO Mads Nipper said in a statement the company was disappointed to be halting the projects because it believes the United States needs wind power to reduce 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,” Nipper said.

Orsted stands to lose a $100 million guarantee it posted with New Jersey earlier this month that it would build Ocean Wind I by the end of 2025. That money could be returned to ratepayers.

Read the full article at the Associated Press

NEW JERSEY: ‘David defeats Goliath!’: South Jersey officials celebrate end of Ørsted offshore wind projects

November 1, 2023 — From anger in Trenton to disappointment in Atlantic City to celebration in Cape May County, Ørsted’s decision to end development of its Ocean Wind 1 and 2 projects off the Jersey Shore delivered a mix of emotions.

In announcing the move Tuesday evening, executives with the Danish energy company cited high inflation, rising interest rates and supply chain issues.

“We are extremely disappointed to have to take this decision, particularly because New Jersey is poised to be a U.S. and global hub for offshore wind energy,” said David Hardy, group executive vice president and CEO Americas for the Danish energy company.

During a news conference Wednesday morning, Cape May County officials called Ørsted’s announcement a win for local shore communities.

“Anyone thinks that they’re going to walk and put their footprints on our beach better beware that they’re not coming into Cape May County, no way, no how,” said county Commissioner Director Leonard Desiderio.

Read the full article at the Press of Atlantic City

Wind industry deals with blowback from Orsted scrapping 2 wind power projects in New Jersey

November 1, 2023 — 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.

Read the full article at the Associated Press

A Small Fish and an Uncollected Fee Add Up to Big-Government Challenge at the Supreme Court

November 1, 2023 — Conservatives who have spent decades asking the Supreme Court to rein in the US government’s regulation of businesses are now betting on a case involving fishermen challenging a $710 fee they’ve never had to pay.

The case could undercut the power of federal regulators on major issues including air pollution and securities fraud. It also exemplifies the way many of the high court’s biggest fights are born these days — driven less by the practical aims of the litigants than by the ideological vision of the interest groups behind the suits.

The fight concerns a federal requirement that some herring boats host government-approved observers aboard their vessels and cover an estimated $710 daily cost. The fisherman say that would be an onerous burden on their family-owned businesses — so onerous they are suing even though the fee is on hold and might never kick in.

“We have not had to pay. We’re just nervous about this hanging over our head,” said Bill Bright in an interview in Cape May, New Jersey, where he runs his two-vessel fishing business. “So we feel that we need to solve this problem now.”

The real stakes lie in the broader legal issue, one that anti-regulatory groups have eagerly sought to get before the Supreme Court and its conservative supermajority. The justices are considering overturning a 1984 ruling known as Chevron v. Natural Resources Defense Council, under which judges typically defer to regulators on the meaning of ambiguous statutes – including those that set out how much power the agency has.

Democratic administrations have relied heavily on the so-called Chevron doctrine, using it to justify rules governing energy, the environment and the workplace. In the herring case, a federal appeals court invoked Chevron in upholding the National Marine Fisheries Service’s payment demand even though Congress didn’t explicitly authorize the rule.

Those pressing the lawsuits say they readily work with the Fisheries Service toward the common goal of a robust herring stock but draw the line at having to pay for monitors.

“We welcome observers on board our fishing vessels, but we shouldn’t have to pay for that,” said Wayne Reichle, president of Lund’s Fisheries Inc., which owns vessels as well as five processing facilities on the East and West Coasts. “That’s something that the government should have to pay for.”

Read the full article at at YahooNews!