Ørsted cancels two major offshore wind projects in the United States
Ørsted, the Danish energy giant specializing in offshore wind farm development, has canceled two major offshore wind projects off the coast of New Jersey, USA. This move represents a significant blow to President Joe Biden’s green energy plans, which call for rapid development in the wind energy sector.
The Danish energy company stated that its board of directors voted to cancel its prominent twin projects, Ocean Wind 1 and Ocean Wind 2, in a decision attributed to changes in macroeconomic factors, including rising inflation, supply chain issues, and higher interest rates.
These two projects had received personal support from the Democratic Governor of New Jersey, Phil Murphy, and were cited by the White House as evidence of the success of the “Biden economy” – referring to the economic policy of the Biden administration.
David Hardy, Deputy CEO of Ørsted, stated, “We have no choice but to halt the development of Ocean Wind 1 and Ocean Wind 2. We are deeply disappointed to make this decision, especially as New Jersey is poised to become a U.S. and global hub for offshore wind energy.”
He added, “We remain committed to the renewable energy market in the United States and building clean energy that will create job opportunities in the technology sector and across the United States, from its northeastern to Texas.”
Hardy continued, “Offshore wind energy remains a comprehensive solution to help the United States achieve its clean energy ambitions, including job creation, local supply chains, and revitalizing the maritime industry.”
According to Hardy, this unexpected step is part of Ørsted’s ongoing review of its economic resilience in the offshore wind energy sector in the United States, where high inflation rates and what he referred to as “counterproductive economics” threatened to “saturate” the emerging offshore wind energy sector. This led many developers, alongside Ørsted, in recent weeks to reassess their plans and current projects.
In response to this decision, the Governor of New Jersey stated in a Wednesday statement, “Ørsted’s decision today to abandon its commitments to New Jersey is disgraceful and raises questions about the company’s credibility and competence.”
He added, “In recent weeks, the company has made public statements regarding the feasibility of Ocean Wind 1 project and its progress,” “My administration has directed a comprehensive review of all legal rights and necessary steps to ensure Ørsted fully and immediately honors its commitments.”
Ørsted had expressed concerns about the uncertainty surrounding its project portfolio in the United States, citing logistical issues and a lack of progress in obtaining tax credits.
Ørsted stated that it may incur losses of 16 billion Danish kroner (2.3 billion U.S. dollars) due to supply chain problems, high interest rates, and a shortage of tax credits.
