OCEAN CITY, N.J. — Orsted, the worldwide wind vitality developer, says its first offshore wind farm in New Jersey will probably be delayed till 2026 as a consequence of provide chain points, greater rates of interest, and a failure up to now to garner sufficient tax credit from the federal authorities.
The Danish firm revealed the delay throughout an earnings convention name Wednesday, throughout which it mentioned it may very well be compelled to write down off about $2.3 billion on U.S. tasks which are price lower than they’d been.
It additionally mentioned it had thought of merely abandoning the Ocean Wind I undertaking off the southern New Jersey coast.
But Orsted nonetheless believes the wind farm, to be in-built waters off of Atlantic City and Ocean City, will probably be worthwhile in the long term.
“As it stands today, we believe the best direction is to continue to invest in these projects,” mentioned David Hardy, an government vp and CEO of the corporate’s North American operations. “It still is the better choice than walking away today.”
The firm didn’t say when in 2026 its Ocean Wind I undertaking will probably be absolutely operational, and a spokesperson couldn’t say Thursday what the brand new timetable is. Previously, Orsted had mentioned energy could be flowing to clients someday in 2025.
Orsted has federal approval for the Ocean Wind I undertaking, and has state approval for a second New Jersey undertaking, Ocean Wind II.
However, throughout Wednesday’s name, the corporate mentioned it’s “reconfiguring” Ocean Wind II and its Skipjack Wind undertaking off the coasts of Maryland and Delaware as a result of they don’t presently meet its projected monetary requirements. It didn’t give particulars of what that reconfiguration may entail.
Two different Orsted tasks – Sunrise Wind off Montauk Point in New York, and Revolution Wind off Rhode Island – are additionally affected by the identical destructive forces requiring the New Jersey undertaking to be delayed. But the New York and Rhode Island tasks stay on schedule, the corporate mentioned.
News of the delay was a blow to supporters of offshore wind in New Jersey, which is attempting to grow to be the capital of the nascent trade on the U.S. East Coast. It additionally provided new hope to foes of the know-how.
Earlier this 12 months, New Jersey Gov. Phil Murphy signed a legislation permitting Orsted to maintain federal tax credit it in any other case would have been required to go alongside to ratepayers. The governor mentioned he acted to guard jobs the offshore wind trade will create.
Republicans, who are inclined to oppose offshore wind in New Jersey and nationally, seized on the delay as additional proof of what they think about the inherent unprofitability of the trade.
“It was a travesty when Gov. Murphy bailed out Orsted at the expense of New Jersey taxpayers the first time they threatened to walk away,” mentioned Republican state Sen. Michael Testa. “I’m calling on the Murphy administration to state unequivocally that our residents will not be sold out for Orsted a second time. Supply chain issues and rising inflation prove that these projects are unsustainable and the cost of continuing these projects will be too much of a burden for our state to bear.”
A dozen environmental teams issued a joint assertion in assist of offshore wind, calling it important to avoiding the worst results of local weather change brought on by the burning of fossil fuels.
“Innovation and transformation take time when done correctly,” the assertion learn. “The offshore wind industry is not immune to the supply chain crisis. We stand united in our support for responsibly developed offshore wind to help New Jersey achieve 100% clean energy.”
Orsted mentioned it has already invested $4 billion in its U.S. wind vitality portfolio, which factored into its choice, a minimum of for now, to stay with its proposed tasks. The firm plans to make a “final investment decision” on whether or not or to not go ahead with U.S. tasks, together with one in New Jersey, by the top of this 12 months or early subsequent 12 months.
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