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Orsted reconfigures offshore wind farm, axes two; Biden admin OKs largest project yet

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Danish energy company Orsted has decided to “reconfigure” one of its offshore wind projects while simultaneously ceasing development on two projects in New Jersey. The future of these projects is uncertain, but the Biden administration remains steadfast in its support for offshore wind development.

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Last week, the Biden administration marked a milestone by approving the largest offshore wind project in the United States to date, the Coastal Virginia Offshore Wind project. Dominion Energy owns that project and expects it to be capable of powering 660,000 homes. The Interior Department’s estimate is even higher, at 900,000 homes.

President Biden has set an ambitious goal of powering 10 million homes with offshore wind energy by 2030. However, the industry has faced financial issues, complicating the path forward for companies like Orsted.

The sector’s financial challenges are evident in Orsted’s recent decision to halt the development of the Ocean Wind 1 and Ocean Wind 2 projects in New Jersey. The company cited inflation, interest rates, and supply chain issues as contributing factors in this move.

Orsted is currently in a dispute with New Jersey over the $300 million guarantee it had agreed to pay in the event that these projects did not materialize.

In the company’s announcement regarding the Ocean Wind projects, Orsted also mentioned reconfiguring another project, Skipjack, planned off the coast of Maryland. WBOC reported that Orsted’s CEO, Mads Nipper, informed investors of a pause in all spending on the Skipjack project. This hesitation underscores the challenges developers have experienced along the East Coast.

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DANISH ENERGY COMPANY ORSTED IS RETHINKING ONE MORE OF ITS OFFSHORE WIND PROJECTS, WHILE SHUTTING TWO DOWN IN NEW JERSEY.

THE FUTURE OF THESE PROJECTS IS UNCERTAIN, BUT THE BIDEN ADMINISTRATION REMAINS STEADFAST IN ITS SUPPORT FOR OFFSHORE WIND DEVELOPMENT.

JUST LAST WEEK, IT APPROVED THE LARGEST PROJECT IN THE US TO DATE–THE COASTAL VIRGINIA OFFSHORE WIND PROJECT.

DOMINION ENERGY OWNS THAT PROJECT, AND EXPECTS IT TO BE CAPABLE OF POWERING 660,000 HOMES. THE INTERIOR DEPARTMENT’S ESTIMATE IS HIGHER–900,000 HOMES.

PRESIDENT BIDEN WANTS TO POWER 10 MILLION HOMES WITH OFFSHORE WIND ENERGY BY 2030.

YET, FINANCIAL ISSUES CONTINUE TO PLAGUE THE INDUSTRY, FURTHER COMPLICATING THE PATH FORWARD FOR COMPANIES LIKE ORSTED.

ORSTED ANNOUNCED ITS DECISION TO HALT DEVELOPMENT OF OCEAN WIND 1 AND 2 IN NEW JERSEY LAST WEEK, CITING INFLATION, INTEREST RATES AND SUPPLY CHAIN ISSUES. AND NOW, THE COMPANY IS SEEMINGLY FIGHTING WITH NEW JERSEY OVER THE $300 MILLION GUARANTEE IT AGREED TO PAY IF THE PROJECTS DIDN’T HAPPEN.

THAT ANNOUNCEMENT ALSO MENTIONED ORSTED IS RECONFIGURING ANOTHER PROJECT PLANNED OFF THE COAST OF MARYLAND, CALLED SKIPJACK.

ACCORDING TO A RECENT REPORT BY WBOC, ORSTED’S CEO MADS NIPPER TOLD INVESTORS LAST WEEK THAT THEY’VE PAUSED ALL SPENDING ON SKIPJACK.

THE DANISH ENERGY COMPANY’S HESITATION WITH THIS MARYLAND PROJECT UNDERSCORES THE CHALLENGES DEVELOPERS ARE FACING ALONG THE EAST COAST. WE’VE SEEN A NUMBER OF CANCELED PROJECTS AND CONTRACTS. SOME COMPANIES–INCLUDING ORSTED–HAVE TRIED RENEGOTIATING THEIR CONTRACTS WITH STATE GOVERNMENTS.