New Jersey Governor Phil Murphy has strongly criticized Orsted's recent decision to cancel its plans for the development of Ocean Wind 1 and 2 offshore wind farms in the United States. Governor Murphy hinted at the possibility of legal action against the energy company, calling Orsted's move “outrageous” and questioning the company's credibility and competence.
Orsted's decision to withdraw from its commitments in New Jersey has raised concerns and uncertainty regarding the future of these offshore wind projects. Governor Murphy expressed his disappointment, stating, “As recently as several weeks ago, the company made public statements regarding the viability and progress of the Ocean Wind 1 project.” To safeguard New Jersey's interests, the state had negotiated important protections ensuring that New Jersey would receive $300 million to support the offshore wind sector if Orsted's projects failed to move forward.
Governor Murphy has instructed his administration to review all available legal options and remedies to ensure that Orsted fulfills its obligations. He emphasized the state's commitment to becoming a global leader in offshore wind and underscored the importance of offshore wind for the state's economic, environmental, and clean energy future.
Orsted, on its part, is evaluating its options for the lease area associated with its canceled Ocean Wind 1 and 2 projects. This assessment may potentially lead to the sale of part or all of the acreage. However, Orsted's CEO, Mads Nipper, made it clear that the company does not plan to continue the development of these projects.
The decision to halt the development of the 2,248-megawatt Ocean Wind 1 and 2 projects was attributed to significant changes in macroeconomic factors within a short period, prompting a broader review of Orsted's activities in the United States. As a result, the company recorded an impairment of €2.7 billion (DKK 19.9 billion).
The news of Orsted's decision led to a notable decrease in the company's share price, falling approximately 20% in a matter of days. David Hardy, Orsted's US Chief Executive, expressed disappointment at having to make this decision, particularly because New Jersey had the potential to become a prominent hub for offshore wind energy in the United States.
While the cancellation of the Ocean Wind projects has brought disappointment, Orsted also announced a final investment decision for the 704-megawatt Revolution Wind project, a joint venture with Eversource. This decision reaffirms Orsted's commitment to building its second commercial-scale offshore wind farm in the United States, contributing to American renewable energy and job creation.
Hardy expressed gratitude to the teams involved in these projects and the dedication of Orsted's employees in navigating the challenges of the offshore wind market. The company remains focused on delivering renewable energy solutions in the United States.