Following a decision by its Board of Directors, Ørsted announced on October 31, 2023 that it will cease development of the Ocean Wind 1 and Ocean Wind 2 projects along the Jersey Shore, citing changing macroeconomic factors, high inflation, rising interest rates, and supply chain bottlenecks impacting the Danish wind developer’s long-term capital investments.
“We have no choice but to cease development of Ocean Wind 1 and Ocean Wind 2,” said David Hardy, Group EVP and CEO Americas at Ørsted, while adding “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.” Hardy went on to say, “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.”
New Jersey’s governor Phil Murphy was less than cordial in response. “Today’s decision by Ørsted to abandon its commitments to New Jersey is outrageous and calls into question the company’s credibility and competence,” said Governor Murphy, adding “I have directed my Administration to take all necessary steps to ensure that Orsted fully honors its obligations.”
The decision to cease development of Ocean Wind 1 and Ocean Wind 2 off the Jersey Shore is part of an ongoing review of Ørsted’s U.S. offshore wind portfolio, but the company said in the announcement that remains committed to the U.S. renewable energy industry, including offshore wind and land-based technologies.
In its official Halloween night announcement Ørsted explained how offshore wind work was also impacted by a vessel delay on Ocean Wind 1 that considerably impacted project timing. However, they were also quick to point out that they still have a lease agreement with the federal government, adding “The company intends to retain the seabed lease area and consider the best options as part of the ongoing portfolio review.”
