Rep. Jeff Van Drew, R-N.J., provides insight into the impact of wind farms on “The Bottom Line.”
Global wind energy developer Ørsted has announced that its planned offshore wind farm off the coast of New Jersey will be delayed until 2026 for several reasons, including supply chain issues.
The company, based in Fredericia, Denmark, is planning several offshore wind farms off the coasts of Maryland, Delaware, New Jersey, New York and Rhode Island.
The Associated Press reported that the Danish company disclosed the delay during a conference call Wednesday, admitting it could be forced to write down about $2.3 billion in U.S. projects that are worth less than previously forecast.
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Fishermen and other activists are sounding the alarm about the ecological dangers posed by the increasing number of offshore wind farms after a spike in marine animal deaths along the East Coast. (AP Photo/Michael Dwyer, File/AP Images)
Specifically, the company alleged that supply chain issues, higher interest rates and failure to obtain enough tax credits from the federal government contributed to the wind farm’s delay.
It was also revealed that the company is considering abandoning Ocean Wind I, a project planned offshore in southern New Jersey.
Ørsted’s Ocean Wind I project received approval from the U.S. Bureau of Ocean Energy Management in July to begin construction of a wind farm 13 to 15 miles off the coast of Atlantic City and Ocean City. Additional approvals are still needed at the federal and state levels, but Ørsted said they expect to have them in place by the second quarter of 2024.
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The Block Island Wind Farm, from Montauk Point, on Long Island, New York, on April 16, 2021. (Photo by Mark Harrington/Newsday RM via Getty Images) (Mark Harrington/Newsday RM via Getty Images / Getty Images)
Construction of the wind farm with almost 100 wind turbines is scheduled to begin this fall. The goal is to provide enough electricity to supply 500,000 households.
Ørsted also has approval to build a second wind farm off the coast of New Jersey called Ocean Wind II, but that project is not as advanced in the regulatory process.
Although the company said Wednesday it was considering canceling the project, it still expects it to be profitable in the long run.
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“As of today, we believe the best direction is to continue to invest in these projects,” said David Hardy, executive vice president and CEO of the company’s North American operations. “It’s still a better choice than leaving today.”
The project was supposed to be operational and provide electricity to customers sometime in 2025, but now it won’t be until sometime in 2026.
During the call, the company also said it is “reconfiguring” Ocean Wind II and its Skipjack Wind project off the coasts of Maryland and Delaware because they are currently not meeting planned financial standards. Details of the reconfiguration were not disclosed.
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The company said Sunrise Wind off Montauk Point in New York and Revolution Wind off Rhode Island were also affected by the same factors as Ocean Wind I but remained on schedule.
Ørsted said it had already invested $4 billion in its U.S. wind energy portfolio, which contributed to its decision to stick with the proposed projects.
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The company is expected to make a “final investment decision” on whether to move forward with U.S. projects, including one in New Jersey, late this year or early next year.
The Associated Press contributed to this report.