NJ offshore wind developer nixes 2 major projects, hobbling Murphy's climate agenda

Danish wind giant Orsted is abandoning two major offshore projects in New Jersey, the company announced Tuesday, marking a major reversal to Gov. Phil Murphy’s climate agenda and further threatening the Mid-Atlantic’s role as a leader in U.S. offshore wind production.

The company said it would cease development of Ocean Wind 1 and Ocean Wind 2, which taken together would have produced about 2,300 megawatts of electricity, or enough to power roughly 1 million homes.

“The current market situation with supply chain challenges, project delays, and rising interest rates has challenged our offshore projects in the US, and in particular our offshore project Ocean Wind 1,” company CEO Mads Nipper said in a statement Tuesday, as part of its quarterly earnings report. “Therefore, as part of our ongoing review of our US offshore wind portfolio, we’ve decided to cease the development of Ocean Wind 1 and Ocean Wind 2.”

Murphy, who made wind the centerpiece of his climate policy during his first run for governor in 2017, chastised the company on the social media platform X, shortly after Orsted made its announcement.

“Today’s decision by Orsted to abandon its commitments to New Jersey is outrageous and calls into question the company’s credibility and competence,” he said. “I have directed my Administration to take all necessary steps to ensure that Orsted fully honors its obligations.”

In September 2022, Murphy signed an executive order raising New Jersey’s offshore wind goal to 11,000 megawatts of capacity by 2040, a significant step towards the state’s larger aim to run on 100% clean energy by 2050.

Ocean Wind 1 was originally set to begin construction this year and be in operation by 2025, according to company projections, but was delayed due to some of the same factors that led to its ultimate demise. . Ocean Wind 2, which would have been slightly larger, was set to begin construction in 2028.

Preparation for the Ocean Wind projects had also begun to transform parts of the South Jersey waterfront, as the state put infrastructure and people in place to build the massive turbines. The notion of reviving moribund coastal manufacturing hubs in the new industry was among the major drivers of political support for the projects.

A new factory under construction in Paulsboro was set to be the largest offshore wind manufacturing plant in the U.S., according to Murphy and the site’s developers. It was expected to rejuvenate the local job market and revitalize an area that had previously languished as a wasteland for petrochemical tanks.

Aside from economic factors, offshore wind faced increasing opposition from concerned locals and environmental groups — some of them reportedly funded by fossil fuel interests —who claimed the industrial development would harm wetlands and marine life along the New Jersey coastline and Delaware River.

A recent poll of New Jersey residents found support for the projects had declined from over 76% in 2019 to 54%, as they became increasingly worried about the state’s tourism economy and whale deaths along the East Coast.

Scientists at the National Oceanic and Atmospheric Administration determined that most recent whale deaths have been caused by shipping activity, not offshore wind turbines.

News of New Jersey’s wind failures comes amid continued challenges to the industry throughout the region. Last month, Gov. Kathy Hochul vetoed a crucial transmission project that was part of the sprawling Empire Wind project being planned roughly 20 miles off the coast of Long Island. Developers say it would consist of about 130 turbines and generate 2.1 gigawatts of electricity — or enough to power 1 million homes.