Huge Offshore Wind Farms Halted in New Jersey as US Struggles To Replicate European Success

Danish energy giant Ørsted has stopped development on Ocean Wind 1 and 2, two massive offshore wind power projects slated to be built off the coast of New Jersey. The company said it would write off as much as $5.6 billion as a result of the decision, citing rising costs.

New Jersey Gov. Phil Murphy, who has championed offshore wind and other clean energy industries, called Ørsted's move "outrageous."

The move underscores the rocky road the U.S. offshore wind industry has to navigate, as costs and political opposition, often led by the fossil fuel industry, put a damper on the Biden administration's plan to install 30 gigawatts of offshore wind power by 2030.

"We are extremely disappointed to have to take this decision," said David Hardy, CEO of Ørsted's Americas region, in a press release. "Macroeconomic factors have changed dramatically over a short period of time, with high inflation, rising interest rates, and supply chain bottlenecks impacting our long-term capital investments."

The decision to cancel the projects, which together would have provided 2.2 gigawatts of electricity, or enough to power around 1 million homes, comes a day after the government approved another offshore wind farm known as the Coastal Virginia Offshore Project. That project will provide 2.6 gigawatts of power from 176 turbines — the largest of any in the pipeline. It is slated to be completed in 2026.

Meanwhile, construction continues at the first large-scale commercial project in the nation, Vineyard Wind, and the first turbines have now been installed off the coast of Martha's Vineyard. But the progress has not prevented broader rumblings about offshore wind's future.

"I am not fully confident we will have the political will" to push past issues like permitting, local opposition and other hurdles, offshore wind expert Erin Baker, of University of Massachusetts, Amherst, told The Messenger in September. Governor Murphy, for his part, seemed confident New Jersey would push on with offshore wind projects with Ørsted.

"[W]hile today is a setback, the future of offshore wind in New Jersey remains strong," Murphy said. "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."