Ørsted Ceases Development of Ocean Wind 1 and Ocean Wind 2
A release tonight from Ørsted: Following a decision by its Board of Directors, Ørsted will cease development of the Ocean Wind 1 and Ocean Wind 2 projects and has taken final investment decision (FID) on the Revolution Wind project.
“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 EVP and CEO Americas at Ørsted. “As a result, we have no choice but to cease development of Ocean Wind 1 and Ocean Wind 2. 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. I want to thank Governor Murphy and NJ state and local leaders who helped support these projects and continue to lead the region in developing American renewable energy and jobs.”
The decision to cease development of Ocean Wind 1 and Ocean Wind 2 is part of an ongoing review of Ørsted’s U.S. offshore wind portfolio with an update planned for its Q4 2023 results announcement. The company remains committed to the U.S. renewable energy industry, including offshore wind and land-based technologies. The board decided today to take FID on Revolution Wind, a 50/50 joint venture with Eversource.
“With our final investment decision, we’re solidifying our commitment to building our second commercial-scale offshore wind farm in the United States, helping to deliver more American energy and American jobs,” Hardy added. “I want to thank our Ørsted employees who helped achieve FID for Revolution, as well as our team at South Fork Wind building New York’s first offshore wind farm, our New Jersey team that worked tirelessly to advance these projects, and our land-based team delivering across our portfolio. As we manage and deliver in a challenging market, our team of experts sets itself apart.”
Included below is a summary of the company’s offshore wind energy projects in the U.S.
Ocean Wind 1 and 2 (1100MW project and 1148 MW projects)
Ørsted has decided to cease the development of Ocean Wind 1 and 2. The projects have experienced significant impacts from macroeconomic factors, including high inflation, rising interest rates and supply chain constraints, particularly a vessel delay on Ocean Wind 1 that considerably impacted project timing. The company intends to retain the seabed lease area and consider the best options as part of the ongoing portfolio review.
Revolution Wind (704MW project in a JV with Eversource)
Building on its commitment to renewable energy in the U.S., Ørsted agreed today to take FID on Revolution Wind. Onshore construction has started, and offshore construction will start in 2024, with the project expected to be completed in 2025. Revolution Wind will create thousands of direct and indirect jobs as well as permanent operations and maintenance jobs across Connecticut and Rhode Island. Once complete, the project will deliver 400 MW of clean energy to Rhode Island and 304 MW of clean energy to Connecticut, combining to power more than 350,000 homes.
South Fork Wind (130MW project in a JV with Eversource)
South Fork Wind continues its construction to progress toward operations, with the offshore substation and all the turbine foundations installed and onshore construction complete. The loading of components for the first turbine was completed on October 30 and plans are underway for sail away to install the first turbine, with all 12 expected to be installed by the end of 2023 or early 2024.
Sunrise Wind (880MW project in a JV with Eversource)
The company welcomes NYSERDA’s request for information (RFI) for an accelerated solicitation for offshore wind capacity, which could provide an opportunity to rebid Sunrise Wind. It is encouraging to see the state advance a potential rapid process as it recognizes the urgent action needed to keep New York’s offshore wind ambitions on track for job creation and climate goals. This is especially important because keeping early projects like Sunrise Wind on current timelines is linked to the success of subsequent projects that will rely on infrastructure, manufacturing and trained workers enabled by these projects. This RFI process could help address macroeconomic factors impacting the project, including a price level that reflects current component and financing costs. The company will assess the conditions of the RFP and determine whether to proceed with a rebid or not.
Skipjack Wind
Ørsted continues to reconfigure this project and expects to have more clarity on its path forward in the coming months as discussions continue with stakeholders in Maryland.
“We remain committed to the U.S. renewable energy market, building clean power that will create jobs across technologies and states from the Northeast to Texas,” Hardy said. “Offshore wind energy remains an integral solution to helping the U.S. meet its clean energy ambitions, including job creation, a domestic supply chain and a reinvigorated maritime industry.”
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Statement by Governor Murphy on Offshore Wind Development in New Jersey
“Today’s decision by Orsted to abandon its commitments to New Jersey is outrageous and 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. In recognition of the challenges inherent in large and complex projects, my Administration in partnership with legislative leadership insisted upon important protections that ensure New Jersey will receive $300 million to support the offshore wind sector should Orsted’s New Jersey projects fail to 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. “Ultimately, as we have seen in other states recently, offshore wind projects awarded prior to 2020 have been impacted by a combination of interest rate escalation, supply chain cost increases, and inflation. And while today is a setback, the future of offshore wind in New Jersey remains strong. In recent weeks we’ve seen a historically high number of bids into New Jersey’s ongoing third offshore wind solicitation, and the Board of Public Utilities will shortly announce two additional solicitations related to our first-in-the-nation State Agreement Approach to build an offshore wind transmission infrastructure. “I remain committed to ensuring that New Jersey becomes a global leader in offshore wind – which is critical to our economic, environmental, and clean energy future.”
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The Governor of New Jersey is an utter fool. I advise him to pivot to reliable energy sources, so that his citizens do not freeze to death in the coming harsh winters of the future.
All I have to say is TEXAS!!!! They had solar and wind farms, and then when the massive freeze hit a couple of years ago, the wind turbines froze, the solar farms froze and didn’t produce energy, causing a large swath of the state to freeze. This is because the idiots in their legislatures and in their regulatory processes could not see that wind and solar are not the answer for energy, energy and/or cooling.
Hopefully the idiots in the NJ Legislature have seen the light for a short period of time, and made the correct decision not to allow Orsted to build off the Shore.
Like no one saw this coming….including Murphy. His outraged rings hollow. He wanted to keep pouring more public money into this absurdity, giving them tax credits and asking for federal funds. This summer, Ørsted was awarded up to $1 billion in federal tax credits in a bill approved by the Democratic-controlled Legislature and signed by Murphy.
The tip off was when PSEG backed out of the offshore wind deal in January. Yet no one in the Murphy administration questioned them WHY? Why didn’t any of NJ’s crack media members pick up on that, or the fact that Ireland last year suspended its offshore wind program
What does Murphy’s old firm have to say about Orsted? Goldman-Sachs owned a 20 percent share in Orsted not that long ago and issued a significant buy rating on its stock
Wind is the future or at least a piece of it. Diverse power generation makes this country stronger. Energy is a commodity. It’s a mistake to invest in only one stock or source. NJ could be a leader solidifying economic prosperity for our children.
Competition for clean energy will lower costs attract jobs and business in a healthy environment. Naysayer s who opposed such projects have hidden agenda. Sadly they spread fear and doubt. Remember we came this far by moving forward not backward!