New Jersey Gov. Phil Murphy’s once favorable stance toward Danish energy company Orsted has taken a sharp turn as he labels its recent decision to cancel two offshore wind projects “outrageous.” Orsted’s cancellation could leave state’s Democratic legislators in a delicate position just a week before they face an election in the state legislature.
Murphy’s support for Orsted was evident in July when he signed a bill that would provide the company with a tax incentive.
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The wind projects, which were intended to bolster New Jersey’s renewable energy sector, now places the state’s Democratic leadership in a precarious situation. Murphy has taken a strong stance, declaring that his administration will ensure Orsted fulfills its obligations, including a commitment to provide $300 million to the state.
The company posted a $100 million guarantee to construct the Ocean Wind 1 project by the end of 2025. According to Murphy, Orsted was required to put up another $200 for the state’s offshore wind sector.
Despite the setback, Gov. Murphy remained optimistic about the future of renewable energy in New Jersey. However, the offshore wind industry faces significant financial challenges, including supply chain issues, rising interest rates, and inflation, which are affecting developers with ambitious plans to construct wind turbines along the eastern and western coasts.
Atlantic Shores, another offshore wind project in New Jersey, is still moving forward, although not without its own financial hurdles. In July, Politico reported that Atlantics Shores said it saw a 30% increase in costs associated with its project.
Gov. Murphy has said that Atlantic Shores is integral to his vision of achieving 100% clean energy in New Jersey by 2035.
SHANNON LONGWORTH: FROM GIVING TAX BREAKS TO A DANISH ENERGY COMPANY…
PHIL MURPHY: “THIS OFFSHORE WIND BILL IS NOW THE LAW OF THE LAND” NATS
LONGWORTH: TO CALLING ITS BEHAVIOR “OUTRAGEOUS,” AND QUESTIONING ITS CREDIBILITY.
DEMOCRATIC GOVERNOR PHIL MURPHY’S ATTITUDE TOWARD ORSTED CHANGED OVERNIGHT WHEN THE COMPANY CANCELED ITS TWO MAJOR OFFSHORE WIND PROJECTS IN NEW JERSEY.
THIS, A MERE WEEK BEFORE MURPHY’S PARTY MEMBERS ARE UP FOR REELECTION IN THE DEMOCRAT-CONTROLLED STATE LEGISLATURE–THE VERY LEGISLATURE THAT NARROWLY GREENLIT THE TAX INCENTIVES IN JULY.
NOW, ORSTED’S MOVE PUTS NEW JERSEY DEMOCRATS IN A PRECARIOUS POSITION. MURPHY SAYS HIS ADMINISTRATION WILL ENSURE ORSTED HONORS ITS OBLIGATIONS POST-DECISION, INCLUDING $300 MILLION FOR THE STATE. THE COMPANY POSTED A $100 MILLION GUARANTEE THAT IT WOULD BUILD OCEAN WIND 1 BY THE END OF 2025. ACCORDING TO MURPHY, ORSTED WAS REQUIRED TO PUT UP ANOTHER $200 FOR THE STATE’S OFFSHORE WIND SECTOR.
WHILE THE GOVERNOR REMAINS OPTIMISTIC ABOUT THE FUTURE OF THIS ENERGY SOURCE IN NEW JERSEY, THE INDUSTRY IS STRUGGLING FINANCIALLY. SUPPLY CHAIN ISSUES, RISING INTEREST RATES AND INFLATION ARE HOBBLING SOME DEVELOPERS WITH AMBITIOUS PLANS TO BUILD TURBINES ALONG THE EAST–AND EVENTUALLY, WEST–COASTS.
ATLANTIC SHORES, ANOTHER PROJECT IN NEW JERSEY, IS STILL MOVING FORWARD; HOWEVER, POLITICO REPORTED IN JULY THAT COSTS WERE UP 30%.
THE GOVERNOR HAS SAID THAT ATLANTIC SHORES WILL SIGNIFICANTLY CONTRIBUTE TO HIS GOAL OF 100% CLEAN ENERGY BY 2035.
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