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Orsted’s Offshore Wind Program in New Jersey

by | Oct 4, 2024 | blog

A Timeline

The journey of Orsted’s offshore wind program in New Jersey has been a complex one, marked by significant milestones and unexpected turns. Here is a detailed timeline of the events from the initial bid to the eventual cancellation of the project.

  • June 2019: Orsted selected for New Jersey’s first offshore wind project, Ocean Wind 1, with an expected operational date in 2024[3].
  • November 2020: NJEDA issues a Notice to sublease for the New Jersey Wind Port.
  • December 2020: Orsted submits a non-binding offer[7].
  • April 2022: Orsted and NJEDA execute a Letter of Intent (LOI) and begin negotiating final terms[7].
  • Fall 2023: Onshore construction for Ocean Wind 1 was scheduled to begin[1].
  • October 12, 2023: Orsted agrees to a $100 million guarantee that Ocean Wind 1 would be operational by December 2025, with an additional $200 million towards the development of the offshore wind industry in New Jersey[5].
  • October 31, 2023: Orsted announces the cancellation of Ocean Wind I and II projects[9].
  • November 1, 2023: Cancellation confirmed, with Orsted taking a $4 billion impairment for the first nine months of the year[10].
  • November 6, 2023: Orsted seeks to withdraw from the $300 million guarantee agreement, stating that the New Jersey Board of Public Utilities had not taken final action to approve the agreement[18].
  • 2024: Offshore construction was expected to ramp up
  • 2025: Original date when Ocean Wind 1 would be operational[3].

The cancellation of Orsted’s offshore wind projects in New Jersey represents a significant setback for the state’s renewable energy goals and the broader offshore wind industry in the United States. The decision reflects the challenges faced by the industry, including supply chain constraints and financial viability concerns.

This timeline provides a snapshot of the key events that shaped Orsted’s offshore wind program in New Jersey. The developments serve as a case study for the complexities involved in large-scale renewable energy projects and highlight the importance of stable policy frameworks and financial structures to support such initiatives.

Sources:

  1. NJ Offshore Wind Farm Construction Updates | Ocean Wind 1, https://oceanwindone.com/about-the-project/construction-updates
  2. About The Project | Ocean Wind 1, https://oceanwindone.com/about-the-project 
  3. New Jersey Selects Ocean Wind for State’s First Offshore Wind Project | Ørsted, https://us.orsted.com/news-archive/2019/06/new-jersey-selects-ocean-wind-for-states-first-offshore-wind-project.
  4. Orsted faces $100 million penalty if New Jersey offshore wind project not done in time | MSN, https://www.msn.com/en-us/news/us/orsted-faces-100-million-penalty-if-new-jersey-offshore-wind-project-not-done-in-time/ar-AA1ibbrx
  5. Orsted Puts up $100M Guarantee That It Will Build New Jersey’s First Offshore Wind Farm by 2025, https://www.usnews.com/news/business/articles/2023-10-12/orsted-puts-up-100m-guarantee-that-it-will-build-new-jerseys-first-offshore-wind-farm-by-2025
  6. Capital Markets Update: Ørsted presents updated business plan following comprehensive portfolio review, https://orsted.com/en/company-announcement-list/2024/02/capital-markets-update–oersted-presents-updated-b-82051
  7. NJEDA Board Approves Ørsted Sublease at New Jersey Wind Port, https://www.njeda.gov/njeda-board-approves-orsted-sublease-at-new-jersey-wind-port/
  8. Orsted axes two New Jersey wind projects, takes $4 billion writedown | CNBC, https://www.cnbc.com/2023/11/01/orsted-axes-two-new-jersey-wind-projects-takes-4-billion-writedown.html
  9. Wind industry deals with blowback from Orsted scrapping 2 wind power projects in New Jersey | AP News, https://apnews.com/article/orsted-offshore-wind-cancellation-new-jersey-turbines-2962a8c94c3e4529d0e01ad0c2d58cc1
  10. Orsted scraps 2 offshore wind power projects in New Jersey, citing supply chain issues | AP News, https://apnews.com/article/offshore-wind-orsted-new-jersey-cancelled-b30049502ac14ca6b46e2d3386a350fd
  11. Orsted scraps 2 offshore wind power projects in New Jersey, citing supply chain issues | CBS News, https://www.cbsnews.com/newyork/news/orsted-scraps-2-offshore-wind-power-projects-in-new-jersey-citing-supply-chain-issues/ 
  12. Orsted scraps 2 offshore NJ wind power projects, citing supply chain issues | NBC New York, https://www.nbcnewyork.com/news/business/orsted-offshore-wind-power-projects-new-jersey/4819335/
  13. Ørsted cancels N.J. project in major blow to offshore wind | E&E News, https://www.eenews.net/articles/orsted-cancels-n-j-project-in-major-blow-to-offshore-wind/
  14. Ørsted awarded 1,148 MW offshore wind contract in New Jersey, fully utilizing its Ocean Wind lease area, https://orsted.com/en/company-announcement-list/2021/06/2255974
  15. Ocean Wind 1 Receives Federal Record of Decision, https://us.orsted.com/news-archive/2023/07/ocean-wind-1-receives-federal-record-of-decision
  16. Ørsted Returns to New Jersey with Ocean Wind 2 Bid, https://www.offshorewind.biz/2020/12/11/orsted-returns-to-new-jersey-with-ocean-wind-2-bid/
  17. Ørsted submits bid in response to latest call for offshore wind, https://ocean-energyresources.com/2020/12/11/orsted-submits-bid-in-response-to-latest-call-for-offshore-wind/
  18. Orsted wants out of $300M forfeiture for scrapped New Jersey offshore wind farms | AP News, https://apnews.com/article/orsted-offshore-wind-new-jersey-guarantee-forfeit-2512e3bdfc2be70c137084fd2bdad02f
  19. Orsted wants out of $300M forfeiture for scrapped New Jersey offshore wind farms – NBC10 Philadelphia, https://www.nbcphiladelphia.com/news/business/orsted-wants-out-of-300m-forfeiture-for-scrapped-new-jersey-offshore-wind-farms/3687945/
  20. Orsted wants out of $300M forfeiture for scrapped New Jersey offshore wind farms, https://www.wind-watch.org/news/2023/11/07/orsted-wants-out-of-300m-forfeiture-for-scrapped-new-jersey-offshore-wind-farms/
  21. N.J. concerned that Ørsted might withdraw from N.J. offshore wind project, https://newjerseyglobe.com/governor/n-j-concerned-that-orsted-might-withdraw-from-n-j-offshore-wind-project-sources-say/
  22. Ørsted “Bounces Check” Seeking Return of $300M NJ Wind Farm Guarantee, https://maritime-executive.com/article/oersted-bounces-check-seeking-return-of-300m-nj-wind-farm-guarantee