In the Press...
Asbury Park Press cites Rep. Smith's opposition to offshore wind plan'$300 million in limbo after Ørsted pulls out'
'Developer backs out of deals to build wind farms in New Jersey'
By Amanda Oglesby
Asbury Park Press | USA TODAY NETWORK – NEW JERSEY
An offshore wind developer that is backing out of deals to build wind farms off New Jersey is under new criticism as the company attempts to pull out of paying millions of dollars in performance guarantees.
Denmark-based Ørsted announced last month it would not build two wind energy farms off the southern New Jersey coastline, despite initial approvals from New Jersey and federal officials.
This month, the company sent a letter to the New Jersey Board of Public Utilities stating it withdrawing a Compliance Filing on its Ocean Wind 1 project. The company had deposited $200 million into escrow for the project, which would be put toward manufacturing facilities for turbine monopiles in Paulsboro, Gloucester County, according to board documents.
Ørsted also posted a $100 million performance security in the event it failed to build Ocean Wind 1, the first of two planned wind farm projects in New Jersey, according to documents submitted to the state agency. Before the project was stopped, Ocean Wind 1 was anticipated to be a 98-wind turbine farm southeast of Ocean City that would have powered about 500,000 homes.
Wind turbines are shown off Block Island in Rhode Island. (file photo)
Ørsted Americas CEO David Hardy blamed “high inflation, rising interest rates and supply chain bottlenecks” for the decision to stop the projects.
Now the company is facing attacks from politicians of both parties.
U.S. Rep. Chris Smith, a Republican from Manchester, criticized Gov. Phil Murphy’s push for offshore wind and the extension of tax incentives to wind developers. Smith also said the tax credits extended to Ørsted could cost taxpayers about $1 billion.
“The ensuing fallout with Ørsted over the approximately $300 million (performance guarantees) —and the potential costly litigation that could follow — demonstrates what happens when elected officials dismiss the well-founded concerns raised by shore residents, local officials, environmentalists, and recreational and commercial fishermen,” Smith said in a statement to the Asbury Park Press.
Click here or on image above to view photo gallery of an East Coast wind farm off in Rhode Island.
In an emailed statement, Gopal said the company was “dishonest about the cost its project would impose on the state and its ratepayers” and that he wants “to ensure every dollar the state committed to Ørsted’s failed projects is returned to New Jersey’s taxpayers.”
Ørsted officials said in an email that they had withdrawn their filings from the Board of Public Utilities for Ocean Wind 1 because they were no longer developing the project. Therefore, they said, they were not pursuing tax incentives related to the project.
A spokesperson for Murphy told the Associated Press on Monday that the governor’s administration “is evaluating Ørsted’s recent statements and correspondence, and will take any and all actions necessary to ensure Ørsted honors its commitment and responsibility to the state.”
Amanda Oglesby is an Ocean County native who covers education and the environment.