Ørsted Cancels Two Wind Projects Offshore New Jersey, Clears Revolution Wind for Takeoff

November 1, 2023, by Adnan Memija

Danish renewable energy developer Ørsted has decided to cease the development of the Ocean Wind 1 and Ocean Wind 2 offshore wind projects in New Jersey. In addition, the company, together with Eversource, has taken a final investment decision (FID) on the 704 MW Revolution Wind, Rhode Island and Connecticut’s first utility-scale offshore wind farm.

Ørsted said that the discontinuation of Ocean Wind 1 and Ocean Wind 2 is a consequence of additional supplier delays further impacting the project schedule and leading to an additional significant project delay.

In addition, Ørsted has updated its view on certain assumptions, including tax credit monetization and the timing and likelihood of final construction permits. Finally, increases to long-dated US interest rates have further deteriorated the business case, according to the developer.

“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,” said David Hardy, Group EVP and CEO Americas at Ørsted.

“As a result, we have no choice but to cease development of Ocean Wind 1 and Ocean Wind 2. We are extremely disappointed to have to take this decision, particularly because New Jersey is poised to be a U.S. and global hub for offshore wind energy.”

The company said it plans to retain the seabed lease area and consider the best options as part of the ongoing portfolio review.

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“We firmly believe the US needs offshore wind to achieve its carbon emissions reduction ambition, and we remain committed to the US renewables market and truly value the efforts by the US government to support the build-up of the US offshore wind industry,” said Mads Nipper, Group President and CEO of Ørsted.

“However, the significant adverse developments from supply chain challenges, leading to delays in the project schedule, and rising interest rates have led us to this decision, and we will now assess the best way to preserve value while we cease development of the projects.”

Located about 24 kilometres southeast of Atlantic City, the 1.1 GW Ocean Wind 1 was planned to feature 98 Haliade-X 12 MW wind turbines and up to three offshore substations within its lease area.

Ørsted, Eversource Greenlight Revolution Wind Offshore Wind Farm

Ørsted has taken FID on the Revolution Wind offshore wind project, which the company owns in a 50/50 partnership with Eversource.

Onshore construction has started and offshore construction will commence in 2024, with the project expected to be completed in 2025.

Revolution Wind expects to receive approval from the Bureau of Ocean Energy Management (BOEM) on its construction and operations plan in November, the final approval required in the agency’s review of the project.

“With this joint final investment decision, we are ready for the start of the full scope of construction for Revolution Wind. We’re ramping up onshore construction of the transmission system of this critical clean energy project, which will deliver enough renewable energy to power more than 350,000 homes in both Rhode Island and Connecticut,” said Joe Nolan, Chairman, President, and Chief Executive Officer of Eversource Energy.

The offshore wind farm will comprise 65 Siemens Gamesa 11 MW wind turbines installed on monopile foundations.

Once up and running, the 704 MW Revolution Wind will deliver 400 MW of offshore wind power to Rhode Island and 304 MW to Connecticut, powering more than 350,000 homes across the two states.