Governor Phil Murphy and Democratic lawmakers had invested significant political capital in approving a contentious offshore wind farm. However, there are growing concerns that the chosen company, Ørsted, may be on the brink of backing out of the agreement, according to several sources cited by the New Jersey Globe.
This potential decision to withdraw from the New Jersey project comes just one week before the state’s midterm elections, with offshore wind becoming a prominent issue, often coupled with unproven allegations regarding its impact on whale and other mammal populations.
Reuters reported today that Ørsted, the Danish energy company, is preparing to scale back its North American offshore wind deals, citing high interest rates, supply chain delays, and other financial challenges. This has raised concerns among some Murphy administration officials that Ørsted may have misrepresented their financial position.
As of now, a spokesperson for Ørsted has not responded to an email seeking comment.
The legislature had pushed through a $1 billion subsidy for Ørsted to construct nearly 100 wind turbines off the south Atlantic coast of New Jersey, contingent on the successful completion of the project. Ørsted recently placed $100 million in escrow to ensure that the first offshore wind farm would be operational by December 2025. Governor Phil Murphy
It’s worth noting that the legislation is currently facing a legal challenge and includes a $300 million clawback provision for New Jersey.
Ørsted is expected to announce its third-quarter earnings tomorrow. State Senator Michael Testa, a vocal opponent of the Ørsted project, has called for a thorough audit to determine the state’s total investment in the deal if the reports about Ørsted’s potential withdrawal are accurate.