New Jersey’s other big wind developer says it’s committed to its project but also faces ‘extraordinary challenges’
Despite Orsted’s abrupt withdrawal from its two approved projects, Atlantic Stores says that, as of now, it’s full steam ahead for its big project.
The Danish global wind giant Orsted might have been the best known company set to build massive offshore wind farms in New Jersey, but it wasn’t the only one.
Atlantic Shores Offshore Wind, a partnership between Shell New Energies and EDF Renewables North America, has been approved by the state’s Board of Public Utilities to build the largest of three approved wind farms. Atlantic Shores Project 1 is expected to have the capacity to generate more than 1,510 megawatts of energy — enough to power 700,000 homes.
Despite Orsted’s abrupt withdrawal from its two approved projects, Ocean Wind 1 and 2, Atlantic Shores says that, as of now, it’s full steam ahead.
“Atlantic Shores remains committed to delivering safe, reliable, renewable power and establishing a thriving domestic offshore wind industry anchored in New Jersey,” Joris Veldhoven, the company’s CEO said in an emailed statement to The Inquirer on Wednesday. “This means supporting New Jersey in meeting its clean energy goals and driving economic growth.”
Veldhoven said the project will create “nearly $2 billion of in-state economic activity, and create thousands of good-paying jobs in New Jersey’s thriving clean energy economy.”
» READ MORE: From 2021: With offshore wind, New Jersey could be launching its biggest job creator ‘since the casinos’
Challenges for wind
Veldhoven acknowledged that the company faces some of the same headwinds as Orsted, which said in an earnings statement Wednesday that it was taking a $4.02 billion impairment charge, or loss of value in assets, in the third quarter with the largest chunk, $2.8 billion related to its Ocean Wind 1 New Jersey project. Orsted cited supply chain delays and increased interest rates as a chief reason. It’s stock plummeted.
Veldhoven said Atlantic Shores faced the same headwinds.
“Despite the extraordinary challenges driven by supply chain constraints, the cumulative impacts of inflation, and higher financing charges associated with building critical infrastructure projects, we are actively engaging in conversations with the administration, regulators, and elected leaders across New Jersey to identify viable solutions that will not only preserve the progress made thus far, but also facilitate the successful execution of Atlantic Shores Project 1,” Veldhoven said.
Little more than a year ago, offshore wind seemed to be flying high with backing not only by Gov. Phil Murphy, but the Biden administration.
In early 2022, the U.S. Department of Interior brought in $4.37 billion in winning bids for an auction of offshore wind leases off the coast of New Jersey and New York. Combined, all the leases could potential generated 30 gigawatts of electricity by 2030.
The leases spanned 480,000 acres in the New York Bight, which, despite the name, falls mostly off the coast of New Jersey, spanning from Long Island, N.Y., to Cape May.
The U.S. government holds the lease areas because they are in federal waters. But states pick developers, create regulations, and figure out how the power is going to cross into their waters and onshore.
» READ MORE: How pro-fossil fuel groups helped sway the public against offshore wind in New Jersey
A blow to New Jersey Wind Port
New Jersey had already approved Orsted’s Ocean Wind 1 and 2, as well as Atlantic Shores’ project. Together, the three projects would have had capacity to power 1.5 million homes.
The state is also developing a 200-acre New Jersey Wind Port in Salem County to foster the nascent offshore wind industry with marshaling operations — staging, assembling, and shipping — as well as manufacturing of giant turbines. It helped with a separate manufacturing area built by EEW-AOS at the Paulsboro Marine Terminal upriver in Gloucester County to build the 3 million-pound, 300-foot-long, all-steel foundations for turbines known as monopiles.
The fate of those projects remain unclear. Tim Sullivan, CEO of the New Jersey Economic Development Authority, declined a request of an interview Wednesday through a spokesperson.
But the state has sunk $1 billion into those projects and offshore wind.
Orsted’s withdrawal poses a major blow to the New Jersey Wind Port. In July, the company had agreed to sublease 34 acres there, becoming the first tenant. Orsted expected to create 200 jobs at the site and 15,000 jobs overall over the 25-year lifespan if its two wind farms.
EEW-AOS did not respond to a request for comment.
Steve Sweeney, a former state Senate president and current union official, said Wednesday that he was undeterred and that “offshore wind development will continue off the New Jersey coast, boosting job growth and improving our environment.”
Sweeney, who is advisory board chair of Rowan University’s Sweeney Center for Public Policy, called Orsted’s decision “shortsighted” and noted the BPU is considering bids from other offshore wind developers for some of the leases — although Orsted retains the leases it successfully bid for. Orsted has not said what it plans to do with the leases but selling them is an option.
Sweeney also noted the state tied a $300 million penalty to Orsted regarding recently enacted state legislation that allowed Orsted to take advantage of federal renewable energy tax credits. The penalty is tied to Orsted building the wind farms.
“Orsted’s decision to keep its New Jersey offshore wind tracts indicated it is not giving up on developing Ocean Wind 1 and 2 in the future,” Sweeney said. “The governor should pursue all remedies to get Orsted to keep its original commitment.”