Noting that “macroeconomic factors have changed dramatically over a short period of time,” renewable energy developer Ørsted has decided to stop pursuing its Ocean Wind 1 and 2 offshore projects, which were planned to total 2,248 MW off the shores of New Jersey.
However, the company also announced that it intends to continue work on another major offshore wind project, the 704 MW Revolution Wind development.
Saying that a confluence of factors including high interest rates and inflation, continued supply-chain problems and issues securing vessels to work on the projects has affected the projects’ prospects, Ørsted’s David Hardy commented that he is “extremely disappointed” to bring the news about Ocean Wind 1 and 2.
“We have no choice but to cease development,” he said.
On the flip side, Revolution Wind – a 50/50 joint venture with Eversource – will continue. The companies took the final investment decision on the project this week, paving the way for more development activity.
“With our final investment decision, we’re solidifying our commitment to building this second offshore wind farm for Rhode Island, and the first offshore wind project for Connecticut,” Hardy said. “We’re already making major investments in local union jobs and port infrastructure to support this project, and that effort will expand in the coming months.”
Revolution Wind received its record of decision in August from the Bureau of Ocean Energy Management (BOEM), and it expects to garner approval from BOEM on its construction and operations plan this month. That will be the final approval required in the agency’s review of the project.
The project is expected to be operational in 2025.
“Make no mistake: Offshore wind’s future in the U.S. is strong,” commented Sam Salustro, vice president of strategic communication at Oceantic Network (formerly the Business Network for Offshore Wind).
“New Jersey remains a market leader and will continue emerging as a hub of manufacturing, logistics and development for the industry. We are encouraged by the governor’s resolute commitment to building a robust industry and look forward to the results of the state’s third solicitation round.”
