Ørsted settles cancellation of two New Jersey offshore wind projects for $125m

New Jersey Governor Phil Murphy has announced that a settlement was reached between state agencies and Danish offshore wind developer Ørsted over two cancelled offshore wind projects in the state.

Ørsted said last October that it decided to cease the development of its Ocean Wind 1 and 2 projects as a consequence of additional supplier delays further impacting the project schedule and leading to a significant project delay.

It also pointed out that tax credit monetisation, timing, the likelihood of final construction permits, inflation, and increases in long-dated US interest rates further deteriorated the business case for the two projects.

After the Danish developer halted the developments, Murphy said he would seek $300m in construction guarantees promised by the company if it failed to build the two offshore wind farms.

On Tuesday, the New Jersey Governor said that Ørsted made a $125m settlement with relevant authorities over the cancelled projects. The money will be reinvested in New Jersey’s offshore wind industry and turbine component manufacturing facilities as well as for the support of other emissions-free energy programs.

Murphy’s office also agreed to accelerate the state’s offshore wind solicitation schedule, expediting the projected opening of the fifth offshore wind solicitation from the third quarter of 2026 to the second quarter of 2025.

“Offshore wind development remains a once-in-a-generation opportunity that will result in significant economic and environmental benefits throughout the Garden State. [We] must remain committed to delivering on the promise of thousands of family-sustaining, union jobs and cleaner air for generations to come,” said Governor Murphy.

“By accelerating New Jersey’s offshore wind development schedule, we underscore our commitment to realizing the industry’s full potential for the benefit of all New Jerseyans,” added Christine Guhl-Sadovy,  president of the New Jersey Board of Public Utilities.

New Jersey opened the state’s fourth solicitation for 1.2 to 4GW of offshore wind generation capacity on April 30 and the application window will remain open until July 10.