On February 3, 2025, the New Jersey Board of Public Utilities (BPU) announced that it was ending the state’s fourth round of solicitation for new offshore wind projects without choosing any additional ones. According to BPU president Christine Guhl-Sadovy, the board will not be proceeding with an award in New Jersey’s fourth offshore wind solicitation. “There were three initial bidders in the fourth solicitation,” said Guhl-Sadovy, adding “However, two bidders withdrew and only Atlantic Shores submitted a best and final offer.”
According to a report in Politico this means that New Jersey will not provide financial backing to new offshore wind projects, which the publication said blows a hole in Governor Phil Murphy’s environmental agenda and legacy, and effectively dooms the Atlantic Shores industrial offshore wind project off the coast of Atlantic City.
“The offshore wind industry is currently facing significant challenges, and now is the time for patience and prudence,” said Governor Murphy following the announcement. “I support the BPU’s decision on the fourth offshore wind solicitation, and I hope the Trump Administration will partner with New Jersey to lower costs for consumers, promote energy security, and create good-paying construction and manufacturing jobs,” Gov. Murphy added.
Guhl-Sadovy said a number of reasons led to the BPU decision, notably the fact that fossil fuel giant Shell backed out as an equity partner in the Atlantic Shores project for 200 offshore wind turbines off the Jersey Coast. “The Board concluded that an award in New Jersey’s fourth offshore wind solicitation, despite the manifold benefits the industry offers to the state, would not be a responsible decision at this time,” Guhl-Sadovy added.
“First Ørsted pulled out of these projects, and now Shell is following suit,” said Congressman Van Drew. “They are beginning to realize what we have been saying all along: these projects are not a practical or viable solution for our energy needs.”
Rep. Van Drew added, “The promises made by the offshore wind industry were always too good to be true, and even the New Jersey Ratepayer Advocate has acknowledged that these projects would have driven our energy rates even higher than they already are.”
Joris Veldhoven, Atlantic Shores’ CEO, was quoted in the Atlantic City Press as saying BPU’s actions stemming from Shell’s withdrawal from Atlantic Shores offshore wind project jeopardize the state’s goal of switching to 100% clean energy within a decade. “We’re discouraged to see the conclusion of this solicitation without an awarded project,” said Veldhoven, questioning whether Murphy’s earlier commitment to reach 100% clean energy by 2035 was possible. “Today’s announcement clearly puts this goal at risk,” Veldhoven added.
According to the Atlantic City Press, the New Jersey will also have to look for uses other than offshore wind for the New Jersey Wind Port, a government-funded facility in Hancocks Bridge in Salem County. Tim Sullivan, CEO of the Economic Development Authority, said the state needs to look for potentially better uses for the South Jersey site given the downturn in offshore wind’s fortunes lately.
“In light of the significant uncertainties in the offshore wind market, we have decided to accelerate our strategic review of options and alternatives for the New Jersey Wind Port,” he said, adding “While recent developments at the federal level and announcements from offshore wind developers are deeply disappointing, they were not unexpected.”
In related news, Ørsted announced in late January that its CEO Mads Nipper was stepping down amid what the company called a “shift of focus” at the Danish group. Nipper, who took the helm in January 2021, faced questions over his stewardship as losses mounted and Ørsted’s share prices slumped 83% since its 2021 peak. “The impacts on our business of the increasingly challenging situation in the offshore wind industry…mean that our focus has shifted,” Ørsted Chair Lene Skole said in a statement.
The Danish wind developer was originally approved for industrial offshore wind development off the New Jersey coast through their Ocean Wind 1 and Ocean Wind 2 projects, until they announced on October 31, 2023 that they were ceasing development of those sites. Ørsted cited changing macroeconomic factors, high inflation, rising interest rates, and supply chain bottlenecks as their rationale for abandoning the Ocean Wind projects off South Jersey which would’ve led to close to 200 wind turbines off South Jersey.
Governor Murphy said at the time, “Today’s decision by Ørsted to abandon its commitments to New Jersey is outrageous and calls into question the company’s credibility and competence.”
As the chips continue to fall in the race to industrialize our nearshore waters along the Jersey Coast, “credibility and competence” will undoubtedly continue to be called into question.
