Danish wind power company cancels two projects off New Jersey shore. Connecticut and RI project to continue.

Tuesday brought evidence of more growing pains in the ocean-based wind power industry. Orsted, the Danish wind power company, announced it is scuttling two significant wind proposals off the coast of New Jersey, according to the AP.

The company pointed to supply chain problems the big cost of financing with interest rates rising to unanticipated levels when the project was planned. Orsted is on the hook for a $100 million guarantee it posted in October for the completion of the projects.

Orsted said it will continue with its Revolution Wind project in Connecticut and Rhode Island.

“Today’s decision by Orsted to abandon its commitments to New Jersey is outrageous and calls into question the company’s credibility and competence,” Governor Phil Murphy said. Murphy has been an enthusiastic advocate of wind power to reduce carbon emissions. The blow comes a week before the state’s legislative elections in which the wind projects have been an issue in some contests.

Wind power developers and their state government partners have misjudged the economics of an industry that is new to the United States. Companies have complained that their government subsidies are inadequate to changing market conditions.

Avangrid announced a month ago that it was abandoning its Park City Wind project due to the same supply and financial challenges that it is incapable of withstanding. It will pay the state a $16 million penalty for terminating the deal.

Tuesday did bring good news for Dominion’s wind power ambitions. The Biden-Harris administration approved the energy giant’s plan to build 176 wind turbines 20 miles off the coast of Virginia.

Published November 1, 2023.