Developer axes 2 major offshore wind projects in blow to Biden's green energy goals

Posted 28 days ago


Global energy developer Orsted abruptly canceled two major offshore wind projects off New Jersey's coast in a blow to President Biden's green energy goals which call for a rapid development of wind energy.

The Denmark-based energy firm said its board of directors voted to ax its high-profile Ocean Wind 1 and Ocean Wind 2 twin projects in response to changing macroeconomic factors, including high inflation, supply chain bottlenecks and rising interest rates. The projects had been personally backed by Democratic New Jersey Gov. Phil Murphy and cited by the White House as proof of "Bidenomics" working.

"We have no choice but to cease development of Ocean Wind 1 and Ocean Wind 2," said David Hardy, Orsted's group executive vice president and Americas division CEO. "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."

"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 continued. "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."

The sudden move, according to Hardy, is part of Orsted's ongoing review of its U. S. offshore wind portfolio. High inflation and other economic headwinds have threatened to sink the nascent offshore wind energy sector, with several developers in addition to Orsted announcing plans in recent weeks to reassess their existing projects.

Ocean Wind 1 — which was the first of the two projects and was first proposed years ago after the Bureau of Ocean Energy Management awarded wind energy development leases during the Obama administration — received formal approval for construction by the Biden administration in July. The project was used by the White House as an example of Biden's successful clean energy goals and economic plan.

"Today’s announcement gives the green light for construction of another. This project, off the coast of New Jersey, will supply enough energy on its own to power nearly half a million homes. This massive expansion in clean energy construction didn’t just happen. It’s not an accident. It’s Bidenomics in action. Big, bold, and building things," White House national climate adviser Ali Zaidi said on July 5.

"Thanks to President Biden’s leadership, the United States will keep seizing opportunities for offshore wind and other clean energy technologies, strengthening our energy security and advancing our climate goals, all while creating good-paying jobs up and down the manufacturing supply chain," he continued.

Interior Secretary Deb Haaland added that approving Ocean Wind 1 was a key milestone in the administration's "efforts to create good-paying union jobs while combating climate change and powering our nation."

Additionally, the White House issued a fact sheet on July 20, highlighting how Ocean Wind 1 was an example of Bidenomics in action.

"From day one, the Biden-Harris Administration has used every available tool to advance the growing American offshore wind industry, and we are seeing the results," White House spokesperson Michael Kikukawa said in a statement. "Since President Biden signed the Inflation Reduction Act, investments in the U. S. offshore wind industry have increased by $7.7 billion."

"While macroeconomic headwinds are creating challenges for some projects, momentum remains on the side of an expanding U. S. offshore wind industry — creating good-paying union jobs in manufacturing, shipbuilding, and construction; strengthening the power grid; and providing new clean energy resources for American families and businesses," he continued.

Kikukawa noted other projects that the Interior Department has recently approved.

But Orsted's announcement could ultimately disrupt the Biden administration's aggressive goal of deploying 30 gigawatts of offshore wind energy by 2030, the most ambitious goal of its kind worldwide.

Just two tiny pilot offshore wind farms are currently operational, while several commercial-scale projects along the East Coast are in various stages of development and permitting. Even if all the currently proposed projects under development were to be completed by 2030, the administration would remain far short of its 30-gigawatt goal.

In October, the New York State Public Service Commission rejected requests from a group of offshore wind energy developers who asked to renegotiate existing contracts amid rising persistent inflationary pressures, a decision that could make the projects impracticable.... (Read more)