Ørsted bins Ocean Wind 1 and 2 projects offshore the United States
Danish offshore wind corporation Ørsted has pulled the plug on Ocean Wind 1 and 2 offshore wind projects off the coast of Cape May County, New Jersey. The company said the decision has been made as part of an ongoing review of its US offshore wind portfolio.
The company further said the decision is a consequence of additional supplier delays further impacting the project schedule and leading to an additional significant project delay. In addition, Ørsted has updated its view on certain assumptions, including tax credit monetization and the timing and likelihood of final construction permits. Finally, increases to long-dated US interest rates have further deteriorated the business case.
Mads Nipper, Group President and CEO of Ørsted, said, “We are extremely disappointed to announce that we are ceasing the development of Ocean Wind 1 and 2. We firmly believe the US needs offshore wind to achieve its carbon emissions reduction ambition, and we remain committed to the US renewables market and truly value the efforts by the US government to support the build-up of the US offshore wind industry. 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. At the same time, with an attractive forward-looking value creation, we progress the Revolution Wind project into the construction phase.”
Cape May County’s opposition
Cape May County led an aggressive opposition campaign for more than two years. Recently, County and multiple private sector Plaintiffs filed a federal lawsuit challenging federal permits issued for the Ocean Wind 1 project.
“There is no doubt that our efforts played a significant role in Orsted’s decision to abandon Ocean Wind One and Ocean Wind Two,” said Former New Jersey Superior Court Judge, Michael J. Donohue, of the law firm of Blaney, Donohue & Weinberg in Avalon, New Jersey, who serves as Special Counsel on Offshore Wind to Cape May County.
“Economic factors certainly impacted Orsted’s decision to abandon Ocean Wind One. But there can be no doubt that after all that was done by the County over the past two years, when the County of Cape May, the Cape May County Chamber of Commerce, the Wildwood Hotel and Motel Association and a group of brave businesses from our Fisheries community had the courage to file an unprecedented federal lawsuit challenging Orsted’s federal permits, it is clear that the situation became untenable for them. Hundreds of thousands of acres of the Atlantic Ocean environment, as well as our local tourism and fisheries economies, have been saved as a result,” Donohue said.
BigRoll Beaufort anchored off Rotterdam
Jumbo-SAL-Alliance was hired to move Ocean Wind 1 monopiles from Rostock to the Paulsboro Marine Terminal in New Jersey. The first shipment has already been completed and the vessel embarked on its second trip across the pond, however, following Ørsted’s decision, the vessel is now waiting at anchorage offshore Rotterdam fully laden.
The decision also comes only days after the Bureau of Ocean Energy Management (BOEM) approved the Construction and Operations Plan (COP).