Ørsted, a leading developer of windfarms in coastal waters, has announced that it will be pulling the plug on two projects in waters off the coastline of New Jersey that would have provided power to residents in the state.
Ørsted, said that it would stop development on two projects- Ocean Wind 1, which had a planned capacity of 1.1 gW, and Ocean Wind 2, with a slightly larger capacity, but announced that its intention of taking a Final Investment Decision (FID) to move forward with the 700-mW Revolution Wind farm. in waters off Rhode Rhode Island, in conjunction with its partner Eversource-a large utility serving the New England states.
Ørsted’s CEO-Americas, David Hardy, said: “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.”
The Ocean Wind projects were also set to buttress the development of a port and assembly area in southern New Jersey. Ørsted’s Group President / CEO, Mads Nipper, said: “As part of the ongoing review of its US portfolio, Ørsted will assess the potential implications for its current long-term strategic build-out ambition and financial targets.”
It would seem like the decision to pull out of the two windfarms will be heading towards a legal battle. A release from the office of New Jersey’s Governor, Phil Murphy, stated that: “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 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.”
It's not all bad news. One bright spot in the offshore wind space is emerging further south, in waters off Virginia. The Bureau of Ocean Energy Management (BOEM), part of the US Department of the Interior, has now given the green light to the Coastal Virginia Offshore Wind (CVOW) project.
If fully built out, CVOW could deliver as much as 2.6 gW of electricity to consumers in the mid Atlantic region. With construction expected to commence in early 2024, eight monopiles loaded in Rostock, Germany on the S. Korean heavy lifter Sun Shine have already arrived in Portsmouth, Va. where Virginia utility Dominion Energy has set up a staging area at a former container storage facility that shuttered in 2020. This project will be moving full steam ahead.
As CVOW advances, the Jones Act compliant WTIV Charybdis, under construction at the Keppel AmFELS yard in Brownsville, Texas with anticipated delivery pushed back to early 2025 will be deployed. Ørsted had intended to deploy the WTIV, with a price tag now estimated to be $625 million, at Revolution Wind, but delays in its construction timetable have sunk that plan.
Reader resources:
https://nj.gov/governor/news/news/562023/approved/20231031a.shtml
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