Ørsted settles cancellation of two New Jersey offshore wind projects for $125 million

New Jersey Governor Phil Murphy announced that an agreement has been reached between state agencies and Danish offshore wind developer Ørsted regarding two canceled offshore wind projects in the state.

Ørsted said last October that she had decided to stop development of its Ocean Wind 1 and 2 projects due to additional supplier delays, further affecting the project schedule and resulting in a significant project delay.

He also pointed out that the monetization of tax credits, the timing, the likelihood of obtaining final building permits, inflation and the rise in long-term US interest rates have further deteriorated the profitability of the two projects. .

After the Danish developer halted developments, Murphy said he would seek $300 million in construction guarantees promised by the company if it failed to build the two offshore wind farms.

On Tuesday, New Jersey’s governor said Ørsted had reached a $125 million settlement with relevant authorities over the canceled projects. The money will be reinvested in New Jersey’s offshore wind industry and turbine component manufacturing facilities, as well as to support other emissions-free energy programs.

Murphy’s office also agreed to accelerate the state’s offshore wind solicitation timeline, accelerating the planned opening of the fifth offshore wind solicitation from the third quarter of 2026 to the second quarter of 2025.

“Offshore wind energy development remains a unique opportunity that will result in significant economic and environmental benefits throughout the Garden State. (We) must remain committed to delivering on the promise of thousands of family-sustaining union jobs and cleaner air for generations to come,” said Governor Murphy.

“By accelerating New Jersey’s offshore wind development timeline, we are underscoring our commitment to realizing the industry’s full potential for the benefit of all New Jersey residents,” added Christine Guhl-Sadovy, president of the New Jersey Board of Public Utilities.

New Jersey opened the fourth RFP for 1.2 to 4 GW of offshore wind generation capacity on April 30 and the application window will remain open until July 10.