City, county, state officials claim victory in long battle
CAPE MAY COURT HOUSE — In a Halloween treat for opponents of offshore wind farms, Danish utility firm Ørsted announced Oct. 31 that it would cease development of the Ocean Wind 1 and Ocean Wind 2 projects.
“Macroeconomic factors have changed dramatically over a short period of time, with high inflation, rising interest rates and supply chain bottlenecks impacting our long-term capital investments,” said David Hardy, Group EVP and CEO Americas at Ørsted. “As a result, we have no choice but to cease development of Ocean Wind 1 and Ocean Wind 2. We are extremely disappointed to have to take this decision, particularly because New Jersey is poised to be a U.S. and global hub for offshore wind energy.”
Ocean City and Cape May County officials, along with citizens groups and state legislators, rejoiced at the news.
“It’s a relief to see this costly and hastily approved project abandoned. It had become increasingly clear that it made no sense for ratepayers, the environment or even the future of clean energy,” Mayor Jay Gillian said.
Board of Commissioner Director Leonard Desiderio, along with attorney Michael J. Donohue, special counsel for offshore wind; county Administrator Kevin Lare and county counsel Jeffrey Lindsay hosted a news conference on the topic Nov. 1 at the William E. Sturm Administration Building (See related story)
Ocean Wind 1 called for as many as 98 wind turbines 15 miles off the coast of Atlantic and Cape May counties meant to produce 1,100 megawatts of power for New Jersey homes and businesses. It would have been the first of multiple offshore electricity-generating wind turbine projects not only off the coast of southern New Jersey, but along the East Coast from the northern coastal tip of North Carolina to just south of Massachusetts. Plans for Ocean Wind 2 were still being developed.
Gillian and City Council had been pushing back against the plan from the beginning, initially concerned about the visual, economic and environmental effects of what they characterized as industrialization of the ocean.
That early opposition led directly to the Legislature and Gov. Phil Murphy granting the state Board of Public Utilities control over allowing transmission cables from the wind farm to run through Ocean City, a right-of-way approval process that used to be under the control of municipalities.
Those lines would have run through the center of the island and out Roosevelt Boulevard to connect to a substation in Beesleys Point in Upper Township at the site of the former B.L. England Generating Station, a plant that was decommissioned after decades of producing electricity through burning coal.
“We will continue with our challenge to the state law that strips Ocean City and other local municipalities of the power to review offshore wind transmission line proposals within their borders,” Gillian said. “This unconstitutional statute sets a dangerous precedent that extends beyond the Ocean Wind projects.”
County officials along with state Sen. Mike Testa and assemblymen Antwan McClellan and Erik Simonsen, R-Cape May, Cumberland, Atlantic, also have pushed back against the plan.
Just two weeks prior to Ørsted’s decision, the county had filed suit against multiple federal agencies and the leadership of those agencies, alleging regulators abandoned their obligations to protect the environment and East Coast marine life in favor of wind energy.
According to a news release announcing the decision to cease development of Ocean Wind 1 and Ocean Wind 2, Ørsted said the move was part of an ongoing review of its U.S. offshore wind portfolio with an update planned for its Q4 2023 results announcement.
The company remains committed to the U.S. renewable energy industry, including offshore wind and land-based technologies, according to the release.
“We remain committed to the U.S. renewable energy market, building clean power that will create jobs across technologies and states from the Northeast to Texas,” Ørsted’s Hardy said. “Offshore wind energy remains an integral solution to helping the U.S. meet its clean energy ambitions, including job creation, a domestic supply chain and a reinvigorated maritime industry.”
The company intends to retain the seabed lease area and consider the best options as part of the ongoing portfolio review, according to the release.
Citizens group Protect Our Coast New Jersey trumpeted the announcement as a victory.
Ørsted’s “statement cited economic ‘headwinds.’ While economic conditions certainly played a role, there is little doubt that public backlash, as well as the tragic deaths of dozens of whales and dolphins along our shores, played a role,” according to spokesman Robin Shaffer
“Gov. Murphy issued a statement last night calling into question Ørsted’s ‘credibility and competence’ and called their move ‘outrageous.’ You know what is more outrageous? Giving away billions in tax and ratepayer money to a multibillion-dollar energy corporation, degrading marine fisheries, hurting small businesses and forever altering our coastlines. Ørsted’s decision to walk away was the right move and represents progress for New Jersey,” Shaffer stated in a news release.
In the coming days and weeks, Shaffer stated, POCNJ will “redouble our efforts to combat projects that have not yet been canceled, such as Atlantic Shores, a three-phase project slated to include 357 massive wind turbines placed as close as 9 miles off the New Jersey and New York coastlines.”
The projects had the backing of political leaders including Gov. Phil Murphy and President Joe Biden, and among numerous trade groups who saw the economic impact of a new industry providing high-paying jobs in construction and maintenance of the wind farms.
Murphy’s 2024 Energy Master Plan called for the state transitioning to 100 percent clean energy by 2050. Last fall he set an offshore wind goal of producing 11,000 megawatts by 2040.
“Today’s decision by Ørsted to abandon its commitments to New Jersey is outrageous and calls into question the company’s credibility and competence,” Murphy said Nov. 1. “As recently as several weeks ago, the company made public statements regarding the viability and progress of the Ocean Wind 1 project.”
Murphy said he took steps to protect the state’s investment, which included construction of a production facility in Paulsboro and a marine terminal in Salem County.
“In recognition of the challenges inherent in large and complex projects, my administration in partnership with legislative leadership insisted upon important protections that ensure New Jersey will receive $300 million to support the offshore wind sector should Ørsted’s New Jersey projects fail to proceed,” he said. “I have directed my administration to review all legal rights and remedies and to take all necessary steps to ensure that Ørsted fully and immediately honors its obligations.”
Murphy said he remains committed to offshore wind energy.
“While today is a setback, the future of offshore wind in New Jersey remains strong. In recent weeks we’ve seen a historically high number of bids into New Jersey’s ongoing third offshore wind solicitation, and the Board of Public Utilities will shortly announce two additional solicitations related to our first-in-the-nation State Agreement Approach to build an offshore wind transmission infrastructure,” he said. “I remain committed to ensuring that New Jersey becomes a global leader in offshore wind — which is critical to our economic, environmental and clean energy future.”
Former state Senate president Steve Sweeney, who was instrumental in passing the legislation to take away Ocean City’s oversight of its rights of way, said the move would delay but not stop the development of wind farms.
“Ørsted’s decision to cease construction of Ocean Wind 1 and 2 is shortsighted, but offshore wind development will continue off the New Jersey coast, boosting job growth and improving our environment,” said Sweeney, advisory board chairman of Rowan University’s Sweeney Center for Public Policy.
Sweeney said six offshore wind developers paid a record $4 billion for leases off the New Jersey coast from Monmouth to Cape May counties last year, and the state Board of Public Utilities is currently considering bids from a wide range of developers to provide electricity generated from offshore wind to New Jersey consumers.
“Ørsted’s announcement shows the wisdom of the state’s decision to include a $300 million penalty in recently enacted tax credit legislation that Ørsted will have to pay if it fails to move forward on construction,” he said. “Ørsted’s decision to keep its New Jersey offshore wind tracts indicated it is not giving up on developing Ocean Wind 1 and 2 in the future. The governor should pursue all remedies to get Ørsted to keep its original commitment.”
By CRAIG D. SCHENCK/Sentinel staff