A green energy company on Tuesday halted two New Jersey offshore wind projects that had been approved for an estimated $1 billion in taxpayer-funded subsidies by Democratic Gov. Phil Murphy and state lawmakers.
Danish organization Orsted cited high inflation, rising interest rates and supply chain issues as reasons they canceled its Ocean Wind 1 and 2 projects – both driven by tax incentives included in President Biden’s so-called Inflation Reduction Act.
“Macroeconomic factors have changed dramatically in a short period of time, with high inflation, rising interest rates and supply chain bottlenecks impacting our long-term capital investment,” Orsted Americas CEO David Hardy said in a statement.
“As a result, we have no choice but to halt the development of Ocean Wind 1 and Ocean Wind 2. We are deeply disappointed to have to take this decision, especially as New Jersey is poised to become a US and global hub for offshore wind energy. .”
The Biden administration’s Inflation Reduction Act gives federal tax credits to green energy companies.REUTERS
Murphy, a staunch supporter of the project, was angered by Orsted’s announcement, calling the withdrawal “outrageous” amid the unprecedented accommodation the Garden State has given the foreign company.
“Orsted’s decision today to abandon its commitment to New Jersey is outrageous and calls into question the company’s credibility and competence,” Murphy said in a statement. “As recently as a few weeks ago, the company made a public statement regarding the viability and progress of the Ocean Wind 1 project.”
Murphy he will explore legal options on the abandoned Orsted project after the state government worked hard to secure funding.
Opponents of the Ocean Wind project argue that large turbines threaten marine life and could interfere with radar systems.AP
“Recognizing the challenges inherent in large and complex projects, my Administration in cooperation with legislative leadership asserted important protections that ensure New Jersey will receive $300 million to support the offshore wind sector if the New Jersey Orsted project fails to proceed,” he added. .
“I have instructed my Administration to review all legal rights and remedies and take all necessary steps to ensure Orsted fully and promptly complies with its obligations.”
The failed development, which would have provided the state with its first offshore wind farm just 13 miles off the South Jersey coast, is expected to generate enough energy to power half a million homes.
In July, New Jersey lawmakers approved up to $1 billion in tax breaks for Orsted to keep the project moving forward – a move that Republicans, commercial fishermen and activists slammed as a generous subsidy for a potentially dangerous environmental project.
Part of the foundation for the offshore wind turbine rests on rollers outside the manufacturing facility in Paulsboro, NJ. AP
In exchange for the grant, which allowed Orsted to collect the federal tax exemption it was initially required to give back to New Jersey ratepayers, the company was required to place a $200 million bond into state coffers, which will supposedly be returned to ratepayers now that the company has canceled the project.
State Sen. Ed Durr (R-Gloucester) criticized the subsidy at the time, arguing that when Orsted first received approval to build the wind farm it “agreed to apply for and return to the ratepayer any federal tax incentives that may be available to offset the cost of higher than ratepayers are paying today for wind energy development.”
“Despite the agreement they signed, Orsted realized that the wind farm project did not make economic sense without a large government subsidy, so now they are looking for a large handout at the expense of New Jersey’s utility customers,” he added.
A land-based wind turbine in Atlantic City, NJ, turns on July 20, 2023. AP
Under the Inflation Reduction Act, renewable developers have the opportunity to receive tax credits of up to 30% for qualifying investments that use union labor, and more credits if the project meets additional criteria.
Orsted officials are reportedly seeking a 40 percent tax credit to proceed with the project.
The New England Fishermen’s Watch Association, which argues sustainable fisheries and other maritime activities off the coast of New Jersey are being threatened by the project, welcomed Orsted’s decision and said it was a sign that future offshore wind projects are doomed to failure.
“Billion dollar cost overruns incurred despite generous grants from the Biden administration and the state of New Jersey will dominate the account of the demise of these projects,” the group said in a statement.
Wind turbines that are part of the Jersey-Atlantic Wind Farm, which is the first onshore wind turbine farm in the United States and is located in Atlantic City, NJ Christopher Sadowski
“This fiscal and logistical pitfall provides a lesson to all states considering a transition to offshore wind energy. But these challenges should not outweigh consideration of the urgent threats that offshore wind farms pose to fisheries, maritime communities and the marine environment.
Rep. Chris Smith (R-NJ), another critic of the project, called Orsted’s announcement a “victory for local residents.”
“Governor Murphy is abandoning the people of New Jersey by throwing taxpayer money at unsound and improperly censored offshore wind projects even when his own Rate Advisory Division is stating that ratepayers will have to pay higher costs and Orsted will get more money from that billion. -dollar bailout he signed into law in July,” Smith told The Post.
“While Orsted’s withdrawal is a victory for local residents, environmentalists, and New Jersey’s commercial and recreational fishermen who have been subject to the coercive powers of the Biden and Murphy Administrations, we are not out of the woods yet. We must continue this critical fight to protect the Jersey Shore from their ocean industrialization plans that will wipe out our marine ecosystem, put recreational and commercial fishermen out of business, seriously affect radar navigation, and jeopardize our national security,” the congressman added.
The company said it will move forward with the Revolution Wind projects in Connecticut and Rhode Island and the South Fork Wind project in New York despite the cancellation of Ocean Wind 1 and 2.
White House spokesman Michael Kikukawa said in a statement that “momentum remains on the side of the growing US offshore wind industry,” despite the collapse of the Ocean Wind project.
“While macroeconomic headwinds create challenges for some projects, momentum remains in favor of a growing US offshore wind industry — creating good-paying union jobs in manufacturing, shipbuilding and construction; strengthen the power grid; and provide a new source of clean energy for American families and businesses,” said Kikukawa.
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Source: thtrangdai.edu.vn/en/
