Offshore wind in New Jersey: What we know after Orsted scraps its projects

Offshore wind developer Orsted has pulled out of two planned projects set to be built off the coast of New Jersey.

Known as Ocean Wind 1 and 2, the projects were to deliver about 2.2 gigawatts of renewable energy once completed. Despite pulling out of New Jersey, the Denmark-based Orsted is continuing to develop other wind projects in the United States and around the world, and said it would “consider the best options” for its lease on the state’s seabed.

Gov. Phil Murphy’s administration has been focused on renewable energy, having set a goal of attaining 100% clean energy by 2035. Offshore wind had been a major component of that goal, but the scrapping of Orsted’s projects could serve as a significant blow to New Jersey’s renewable energy efforts.

Here is what you need to know:

Orsted’s Ocean Wind 1 was to be built about 15 miles off the coast of Atlantic City. At 1,100 megawatts, the project was set to be one of the largest wind farms in the United States, with the ability to generate power for roughly 500,000 homes.

It’s cables were to be run onshore at the former B.L. England power plant in Somers Point, which was recently imploded.

Plans for Ocean Wind 2 were similar, with that project set to produce 1,148 megawatts of power, enough to supply energy to another 500,000 homes.

Orsted said it pulled out of Ocean 1 and 2 for economic reasons, including “high inflation, rising interest rates, and supply chain bottlenecks.”

“As a result, we have no choice but to cease development of Ocean Wind 1 and Ocean Wind 2,” said David Hardy, group executive vice president and CEO Americas at Orsted.

Over the summer, the company warned of impending financial issues for its New Jersey projects. The company, as well as other offshore wind developers, had been rallying for federal tax credits that the state said needed to be returned to ratepayers. Murphy, as well as other officials, helped make that happen, but faced ire from Republicans as a result.

The company’s decision comes following recent political difficulties for offshore wind projects. Residents and officials in New Jersey coastal towns have long rallied against wind farm construction, expressing concern of disruption of ocean views, the Shore economy, and local wildlife.

In particular, public perception that wind farm survey vessels were responsible for killing and stranding whales has become a focus. Those notions, The Inquirer has reported, come from a number of anti-wind farm groups, some of whom were backed by fossil fuel interests. No scientific evidence has been offered for the claim that wind farms contribute to whale deaths, with the National Oceanic and Atmospheric Administration saying that most whale deaths are attributable to vessel strikes and entanglement in fishing gear.

Murphy called Orsted’s decision “outrageous,” saying in a statement that the move “calls into question the company’s credibility and competence.”

His administration, Murphy added, would look to “review all legal rights and remedies...to ensure that Orsted fully and immediately honors its obligations.”

Brigantine Mayor Vince Sera, however, issued a positive statement in the wake of Orsted’s decision.

“The Brigantine Community is happy to see Orsted pull out of New Jersey,” Sera said. “These ocean wind projects are bad for the environment, bad for our economy, and have no positive impact on climate change or global warming.”

State Sen. Vince Polistina (R., Atlantic), a noted offshore wind opponent, lauded the decision as well.

“I want to applaud the concern by so many people in Atlantic County who had questions about the costs of the project, the impact on utility rates, and how the work was affecting our marine environment,” Polistina said.

It’s not clear.

Another developer, Atlantic Shores Offshore Wind, is set to build wind farms of the coast of New Jersey and New York. One project, which is to be built off the coast of Atlantic City, is planned to power 700,000 homes with 1,500 megawatts of power by 2027 and 2028. But it isn’t clear if Orsted’s withdrawal will impact that project.

Others believe the company’s decision will certainly impact renewable energy efforts. Activist and renewable energy supporter Jeff Tittel said it will be “a devastating setback for offshore wind in New Jersey.”

Orsted, he added, didn’t listen to the public, and bungled the projects, he added.

“They didn’t listen to the public and did not understand our needs or politics,” Tittel said. “They thought that the would get a blank check. Their arrogance is why these projects failed.”

Inquirer staff writers Frank Kummer and Amy S. Rosenberg contributed to this article.