The Danish firm Orsted recently pulled out of two New Jersey projects, citing supply chain challenges and rising interest rates.
In a surprise move to many, Danish firm Orsted recently pulled out of two offshore wind projects in New Jersey, citing supply chain challenges and rising interest rates. The announcement was seen as a blow to a national push to increase renewable energy generation in response to escalating climate change. The pullout is set to cost Ostred up to $5.6 billion and has alarmed many public and private sector leaders with similar projects. At least one Maryland business that was set to provide steel to the two projects has been negatively impacted by the announcement. Officials in both Maryland and Delaware are hopeful the Orsted’s Skipjack project off the coast of Delaware and Maryland is still in the works.
According to the Daily Record:
“Orsted continues to develop Skipjack Wind and expects to have more clarity on its path forward as we continue discussions with stakeholders in Maryland and Delaware,” Maddy Voytek, head of government affairs and market strategy for Maryland. . .
(Paul) Pinsky (Director of the Maryland Energy Administration) said in a statement that “we would like to avoid the interruptions witnessed in the Atlantic coastal states, but we also want to remain vigilant of any additional costs shouldered by ratepayers.”
While the development of wind has taken a hit globally, the headwinds facing projects in the United States are particularly acute as many of the contracts lacked protections from inflation, and developers incurred additional costs from delays at the federal level. Ostred is currently seeking additional incentives from Maryland as discussions continue about the viability of Skipjack.