ATLANTIC CITY, NJ – Orsted, the Danish wind energy company that was to build two major wind farms off the coast of New Jersey was already facing tough economic challenges before they announced their pullout of Ocean Wind I & II.
Today, those problems were made worse after the stock opened in early trading at around $12, down from $63.41 just two years ago.
Orsted CEO Mads Nipper said related impairments from that decision will cost the company $5.6 billion.
He also said he would use New Jersey’s failure as a learning moment for the company in the future.
“It is without a doubt proven that this was the wrong decision,” Nipper said. “I want to be absolutely clear that we are taking away all learnings from this into future project development and timing for capital commitments.”
He also hinted of a wind energy apocalypse on the horizon as wind developers claim the electricity price on offer at auctions has been too low for them to embark on new projects given the industry’s problems with rising costs.
“This perfect storm hinges on mostly one thing, namely to ensure that there is a reset of what offshore power needs to cost right now,” Nipper said.
Although the New Jersey project is dead as far as Orsted is concerned, the company said it would be focusing on more profitable and achievable projects around the globe.
In the United States, offshore wind development relies heavily on government funding and tax credits.