Developers question financial viability as New Jersey Gov. Murphy boosts goals for offshore energy
By TOM JOHNSON, NJ SPOTLIGHT ENERGY/ENVIRONMENT WRITER
The offshore wind industry is facing new scrutiny as some initial proposals to build big wind farms off coastal waters are running into unforeseen fiscal challenges driven by high inflation, rising interest rates, and continued constraints in the supply chain.
Those factors have led one company to ask to renegotiate its contract to build a 1,200-megawatt offshore wind farm in Massachusetts, a bid so far rejected by regulators there. They have also spurred Public Service Enterprise Group to reconsider its 25% investment in Ørsted’s 1,100-MW project to be built 15 miles off the Atlantic City coast.
Whether those issues are significant enough to slow New Jersey’s aggressive push to be a leader in the emerging industry remains to be seen, but there are critics who hope it does.
“The dirty secret of offshore wind is the economics don’t make sense,’’ said Mike Makarski, a spokesman for Affordable Energy of New Jersey, an organization that has been a persistent critic of the Murphy administration’s plan to shift to 100% clean energy by mid-century.
“The returns on our U.S. projects, including Ocean Wind I (the first approved New Jersey offshore wind farm), are not where we want them to be,’’ said CEO Mads Nipper, but he added the company remains committed to those projects.
Ørsted, PSEG, and the New Jersey Board of Public Utilities have discussed the status of the Ocean Wind project, according to Joseph Fiordaliso, president of the BPU, the state agency overseeing the offshore wind initiative.
“Nothing is in jeopardy,’’ he said, making a statement about the potential setbacks at an unrelated BPU meeting earlier this month. “We all want to work it out. We will work it out.’’
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