Orsted cancels two New Jersey offshore wind projects, incurs $4 billion writedown.

• Orsted, a Danish wind power developer, declared a $4 billion write-off for the initial nine months of the year and announced the cancellation of two off-shore wind projects in New Jersey.
• New Jersey's first offshore wind farm, Ocean Wind 1, would have been a 500 MW project capable of powering half a million homes starting in 2025. A second, similarly sized project would have followed a few years later.
• The project cancellations were due to significant adverse developments from supply chain challenges, resulting in delays in the project schedule, and rising interest rates, as stated by Orsted CEO Mads Nipper.

This week, Orsted, a Danish wind power developer, announced that it is canceling two off-shore wind projects in New Jersey and will take a $4 billion impairment for the first nine months of the year.

The company has allocated an additional $1.55 billion for potential contract cancellation fees, which could increase the total write-off to $5.55 billion.

According to a statement from Orsted, Mads Nipper, CEO, attributed the project cancellations to "significant adverse developments from supply chain challenges, leading to delays in the project schedule, and rising interest rates."

Orsted announced that $2.8 billion of the $4 billion writedown was linked to the Ocean Wind 1 project.

The Ocean Wind 1 project, New Jersey's first offshore wind farm, would have generated enough electricity to power half a million homes with 98 turbines located 15 miles off the coast of southern New Jersey. Construction was set to begin this fall, with the project becoming operational in 2025.

The Ocean Wind 2 project, similarly sized to the one off the southern New Jersey shore, was scheduled to begin in 2028, according to a website.

Nipper stated in a written announcement that we are extremely disappointed to reveal that we have decided to halt the development of Ocean Wind 1 and 2.

Nipper stated that the US needs offshore wind to achieve its carbon emissions reduction goals and remains committed to the US renewables market, valuing the efforts of the US government to support the growth of the US offshore wind industry.

The Revolution Wind project has entered the construction phase, as stated by Nipper.

The Revolution Wind project, a joint venture between Revolution Wind and Eversource, will be situated over 32 miles southeast of the Connecticut coast, as per Orsted's website. Additionally, Orsted has ongoing projects in Maryland, New York, and Rhode Island.

Orsted had previously informed investors that it expected to face financial difficulties. On August 29, the company announced that it anticipated a potential write-off of up to $2.3 billion in its U.S. portfolio. However, the situation worsened, and the company stated that the US offshore wind projects have experienced additional negative developments since the announcement.

In 2022, Orsted, which is headquartered in Denmark and employs 8,700 people, generated $18.7 billion in revenue.