New Jersey residents will remember the company’s dramatic withdrawal in October 2023 from its Ocean Wind 1 and 2 offshore wind projects. The company cited high inflation, rising interest rates, and supply chain delays for its decision. In May 2024, New Jersey and Ørsted reached a $125 million settlement to resolve financial claims related to the scrapped deals.

The cancellation dealt a major setback to then New Jersey Governor Phil Murphy’s clean energy goals. Ørsted initially tried to bypass a $300 million completion penalty. However, both sides agreed to a $125 million payout from Ørsted. The state designated these funds for local wind ports, component manufacturing, and clean energy programs.

Despite its disastrous New Jersey experience, Ørsted went on to complete its offshore wind deal with New York State. 

Why? The understanding at the time was that, while New Jersey locked Ørsted into older, lower-priced electricity contracts that became financially impossible to build because of inflation, New York allowed Ørsted to exit those agreements and re-bid its Sunrise Wind project at a higher, realistic price.

Construction of Sunrise Wind is under way, with several key construction milestones already complete. Full commercial operation is expected in the second half of 2027. Once fully operational, Sunrise Wind is expected to be New York’s largest offshore wind project, generating enough electricity to power around 600,000 homes.

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