By Leah Cruz
Staff Writer
Multinational Danish energy company, Orsted, has announced its plans to pull out of the New Jersey project to create wind farms off the state’s coast on Nov. 1. The announcement comes as a setback for Gov. Phil Murphy’s sustainability efforts to decrease greenhouse gas emissions.
Orsted was originally contracted to create two wind farms off the coast of New Jersey, Ocean Wind 1 and Ocean Wind 2. Murphy strongly backed the two projects and expressed his hopefulness for the future of NJ amidst the setback.
“I remain committed to ensuring that New Jersey becomes a global leader in offshore wind—which is critical to our economic, environmental, and clean energy future,” he said in a statement.
According to the New York Times, NJ officials have been aiming to produce 11 gigawatts of wind power by 2040 as the Biden administration plans to install 30 gigawatts all over the U.S. by 2030.
Ocean Wind 1 and 2, however, are not the only offshore wind projects that NJ was relying on to generate clean energy.
AP reports four new projects that have been proposed just this August, along with the Atlantic Shores project. According to the company’s website, this wind farm project is set to create “1.5 gigawatts off the coast of Atlantic City that will power 700,000 homes by 2027 and 2028.”
Orsted, the world’s largest offshore wind developer, cited high inflation, supply chain issues and rising interest rates as factors contributing to its decision to cancel both projects.
Chief Executive Officer of Orsted, Mads Nipper, said in the company’s 2023 earnings conference call that the company decided to “de-risk the most painful part of our portfolio, namely the U.S. projects.”
As the renewable wind industry is facing equipment shortages and supply chain issues in response to the increasing interest in combating climate change through green energy initiatives, states investing in clean energy including New Jersey, New York and Massachusetts will be facing setbacks, according to the New York Times.
Finding a new developer to carry out the offshore wind farms that would have created 2.2 gigawatts of clean energy and powered about 1 million homes in NJ will not come easy, reported the Philadelphia Inquirer.
Since the announcement, Orsted’s stock price has gone down over 26%, according to AP News, as the company is writing off $4 billion due to the project cancellation.
Residents of Jersey shore towns opposed the wind farm projects, beginning as early as March 2023 when a protest was held just outside the New Jersey State House in Trenton.
"I love the beach. I grew up at the beach," Christina Powell, a protester, told CBS News. "I do not want it destroyed with industrialization. I don't want any wind turbines out on our ocean whatsoever. I think they are responsible for killing our marine life."
Orsted’s announcement, thus, comes as a relief for many who adamantly opposed the development of offshore wind farms.
While Orsted’s backing out of the deal does not directly affect the College, it is worth noting that a newly appointed Board of Trustees member, Madeline Urbish, is the current Head of Government Affairs at the company.
As New Jersey continues to navigate ways and initiatives to contribute to combating climate change and generating clean energy, offshore wind farms remain a politically charged issue amongst both residents and lawmakers of the state.
