TRENTON, NJ—New Jersey Governor Phil Murphy announced that the state has secured a $125 million settlement from Danish energy company Ørsted. This agreement comes after Ørsted decided to halt development on the Ocean Wind 1 and Ocean Wind 2 projects.
Originally, Murphy promised New Jersey was to receive $300 million to support its offshore wind sector, highlighting a significant shortfall in the settlement amount.
Governor Murphy expressed disappointment in Ørsted’s decision to abandon the projects, which he described last year as “outrageous” and damaging to the company’s credibility. The settlement funds are earmarked to further New Jersey’s clean energy initiatives as outlined in the state’s Energy Master Plan.
In addition to the settlement, the New Jersey Board of Public Utilities (NJBPU) announced a pause in moving forward with the Second State Agreement Approach for offshore wind transmission.
On Halloween day last year, Murphy said, ““Today’s decision by Orsted to abandon its commitments to New Jersey is outrageous and calls into question the company’s credibility and competence. As recently as several weeks ago, the company made public statements regarding the viability and progress of the Ocean Wind 1 project. 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 Orsted’s New Jersey projects fail to proceed. I have directed my Administration to review all legal rights and remedies and to take all necessary steps to ensure that Orsted fully and immediately honors its obligations.”
This pause allows the NJBPU to evaluate the implications of the new Federal Energy Regulatory Commission’s Order 1920 and to engage in the ongoing reforms by regional grid operator PJM Interconnection, aimed at optimizing long-term transmission planning and cost-efficiency.
This settlement concludes the legal disputes between New Jersey and Ørsted concerning the Ocean Wind Projects, with both parties agreeing to release claims related to the development stoppage. The decision underscores the complexities of advancing large-scale energy projects and the importance of safeguarding state interests in renewable energy ventures.