Ørsted and New Jersey Reach USD 125 Million Settlement Over Scrapped Offshore Wind Projects

May 29, 2024, by Adnan Memija

Danish renewable energy developer Ørsted will pay New Jersey USD 125 million (approximately EUR 115 million) to settle claims over the company’s cancellation of two offshore wind farm projects, Ocean Wind 1 and Ocean Wind 2, last year.

The state’s Board of Public Utilities (BPU) said the USD 125 million it will receive will be used to support investments in wind energy facilities, component manufacturing facilities, and other clean energy programmes.

Last July, New Jersey Governor Phil Murphy signed a bill that would have allowed Ørsted to retain federal tax credits.

Before the projects were abandoned, Ørsted had provided a USD 100 million guarantee to complete one of them, Ocean Wind 1, by the end of 2025. Additionally, the company was obligated to contribute USD 200 million toward developing the offshore wind industry in New Jersey.

According to the developer, supply chain disruptions, rising interest rates, and inflation were some of the causes of the discontinuation of the Ocean Wind 1 and Ocean Wind 2 offshore wind 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.

Last November, the company wrote off almost EUR 3.8 billion, due largely to costs associated with the cancellation of its two offshore wind projects (DKK 19.9 billion).