TRENTON, NJ – This week, rising costs sunk three offshore wind farm projects in New York State. After a tumultuous year on the other side of the river, New Jersey lost two large projects being built by Danish wind energy giant 0rsted. 0rsted bailed on New Jersey, and costs are continuing to rise, making previous wind energy deals unaffordable.
Can New Jersey be the next in the line of turbine dominos to fall?
New York Cancels Three Offshore Wind Projects Over Turbine and Pricing Challenges
New York has terminated three offshore wind projects after encountering pricing issues triggered by GE Vernova’s decision to stop developing 18-megawatt turbines. These projects depended on the larger turbines, which GE planned to manufacture at a Hudson River facility supported by a $300 million state subsidy. With the shift to producing 15.5-megawatt turbines announced in February, the costs for these wind farms increased due to the need for more turbines.
The revised cost projections reached $150 per megawatt hour, prompting developers to pull out of the initially approved deals. This cancellation not only affects New York but also poses potential cost implications for Massachusetts, Connecticut, and Rhode Island, which are currently procuring offshore wind power jointly. The failed projects include collaborations between Vineyard Offshore and Copenhagen Infrastructure Partners; RWE Offshore Renewables and National Grid Ventures; and TotalEnergies, Ride Light and Power, and Corio Generation.
Vineyard Offshore is concurrently bidding on the New England procurement, in partnership with Avangrid to construct Vineyard Wind 1, which uses 13.6-megawatt turbines from GE Vernova and was contracted at $89 per megawatt hour before economic shifts due to the pandemic and the war in Ukraine.