Orsted scrapped two of the largest wind farm projects in the US over continuing supply chain turmoil, high interest rates and permitting delays, Recharge reported.
Mads Nipper, group chief executive of the Danish energy company, pointed to vessel delays among factors in the decision to halt the 1.1-GW Ocean Wind 1 and 1.15-GW Ocean Wind 2 off New Jersey.
“We are extremely disappointed to announce that we are ceasing the development of Ocean Wind 1 and 2,” Nipper said.
“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.”
The decision to cancel the projects is part of an ongoing review of Orsted’s US offshore wind portfolio with an update planned for its fourth-quarter results announcement.
These are the fourth and fifth US projects to be terminated this year due to macroeconomic headwinds, with more expected following New York’s decision not to renegotiate offtake contracts.
In an analyst call on Wednesday, Nipper said that further delays in vessel availability in the market “would indicate a multi-year delay of the entire project”.
“What that would mean is that due to this significant additional delay caused by the supply chain delays, we will be in a situation where we need to go out and re-contract all or very large scopes of the project at expectedly higher prices,” he said.
Orsted is among offshore wind developers that have been impacted by delays in constructing the Charybdis, which will become the first wind turbine installation vessel built in the US to qualify with the Jones Act, and Recharge has reported that it is expected to be the last.
An alliance of Orsted and US utility Eversource is also the charterer behind Edison Chouest’s order, at the shipowner’s own yard in Louisiana, for a Jones Act-compliant service operation vessel, the 80-metre-long Eco Edison.
This story was adapted from multiple articles on Recharge. Eric Priante Martin contributed writing to the TradeWinds version.
