New Jersey and Orsted have settled mutual claims stemming from the company’s decision last October to abandon two wind farms off the state’s south coast, the state’s Public Utilities Commission said Tuesday.
The state said the $125 million it will receive will be used to support investments in wind energy facilities, parts manufacturing facilities and other clean energy projects.
Before those projects were abandoned, Orsted made a $100 million guarantee to build one of the projects, Ocean Wind One, by the end of 2025. industry.
A week after canceling the projects last fall, Orsted said it was trying to get rid of $300 million worth of guarantees because it was no longer moving forward with the projects.
Orsted said in a statement to The Associated Press that it was “pleased” with the settlement and said it represented the company’s entire financial obligation to the state.
The agreement, along with other initiatives announced by New Jersey on Tuesday, “underscore New Jersey’s commitment to offshore wind and the industry’s bright future in the Garden State.”
“We look forward to continuing our valuable partnerships with New Jersey stakeholders as we advance clean energy projects across the region,” the statement read.
The company did not say whether it plans to propose future projects in New Jersey.
But Jeff Tittle, a longtime environmentalist and retired president of the Sierra Club of New Jersey, called the settlement with Orsted a “sellout.”
“The governor said they would take responsibility for the entire $300 million owed to the state for the failed project,” he said. “They were absolved of liability, paid less than half, and New Jersey lost $175 million. It was a bad deal for New Jersey.
The settlement announcement was one of several made Tuesday by Democratic Gov. Phil Murphy’s administration regarding offshore wind power.
The state said it was bringing forward the next round of tenders for additional offshore wind projects from the third quarter of 2026 to the second quarter of 2025.
The state also said it was suspending plans to coordinate transmission planning for offshore wind projects with regional grid operator PJM Interconnection because of new rules from federal energy regulators that could impact planning and costs.
“Offshore wind development remains a once-in-a-lifetime opportunity that will deliver significant economic and environmental benefits throughout the Garden State,” Murphy said in a statement. “At a critical inflection point for the industry in New Jersey and nationwide, we It is vital that we continue to work on our promise to provide livelihoods for thousands of families, union jobs and cleaner air for generations to come.”
Last fall, Orsted wrote off $4 billion, largely because of costs associated with canceling two projects in New Jersey. The company cited supply chain issues, inflation and a failure to receive adequate government tax credits.
New Jersey currently has preliminary approval for three offshore wind power projects.
The state faces strong opposition to offshore wind power from many groups who say the projects are too costly and could be harmful to the marine environment.
Protect Our Coast New Jersey said the move to accelerate offshore wind contracts “reflects the changing political landscape in Washington and New Jersey” and called Murphy’s clean energy goals “arbitrary and unrealistic.”
Supporters say it’s an important way to transition away from the burning of fossil fuels that contributes to climate change.
