Two significant offshore wind projects, previously endorsed by the Biden administration, have been abruptly canceled by global energy developer Orsted.
Orsted, a Denmark-based energy firm, has decided to halt the development of its Ocean Wind 1 and Ocean Wind 2 projects. This decision comes as a setback to President Biden's green energy aspirations.
The company cited changing macroeconomic factors as the primary reason for this decision. These factors include high inflation, supply chain disruptions, and increasing interest rates.
David Hardy, Orsted's group executive vice president and CEO of the Americas division, expressed deep disappointment over the decision, especially given New Jersey's potential as a global hub for offshore wind energy.
Despite this setback, Hardy emphasized Orsted's commitment to the U.S. renewable energy market. He believes that offshore wind energy remains a crucial solution for the U.S. to achieve its clean energy goals.
Previously, the White House had lauded the Ocean Wind 1 project, with national climate adviser Ali Zaidi labeling it as "Bidenomics in action." This project received federal approval in July, serving as a testament to Biden's successful clean energy and economic strategies.
Orsted's decision is part of a broader review of its U.S. offshore wind portfolio. The current economic challenges, including high inflation, have put the emerging offshore wind energy sector at risk.
Several other developers, besides Orsted, have also announced plans to reevaluate their ongoing projects, Fox News reported.
The Ocean Wind 1 project, which had been in the pipeline for years, received the green light from the Biden administration in July. The White House had showcased this project as a symbol of Biden's triumphant clean energy initiatives.
However, Orsted's recent announcement could hinder the Biden administration's ambitious target of deploying 30 gigawatts of offshore wind energy by 2030. As of now, only a few pilot offshore wind farms are operational, with several larger projects along the East Coast still in the development and permitting stages.
Interior Secretary Deb Haaland stated that the approval of Ocean Wind 1 was a significant step in the administration's efforts to combat climate change while creating good-paying union jobs.
However, the recent turn of events has raised concerns about the feasibility of such projects in the current economic climate.
Energy group Power The Future's founder, Daniel Turner, commented on the situation, "When green dreams run into hard reality, the results are never pretty. Wind power receives billions in taxpayer support, yet we see project after project failing."
Turner further added that the people of New Jersey are the ones who will bear the brunt of these failed projects, especially with the looming energy crisis in the winter.
The Ocean Wind projects would have installed nearly 200 wind turbines across 161,000 acres in the Atlantic Ocean, near Cape May County. These turbines, visible from every beach in the county, had sparked concerns about environmental and economic impacts.
New Jersey Governor Phil Murphy expressed his outrage at Orsted's decision, questioning the company's credibility. He has directed his administration to ensure that Orsted honors its commitments.
Furthermore, a coalition led by Cape May County had previously sued the Biden administration, alleging hasty approval of Ocean Wind 1 without adequate assessment of potential negative impacts.
Rep. Chris Smith, R-N.J., viewed the project cancellations as a victory for his constituents. He highlighted the economic unsustainability and environmental risks associated with such massive ocean wind turbines.
Another congressman, Rep. Jeff Van Drew, R-N.J., also welcomed the news, criticizing the projects as being more beneficial for foreign-owned offshore wind companies than for the local community.
Despite these setbacks, the push for green energy continues, with the Biden administration still aiming to achieve its offshore wind energy goals by 2030.