A green energy company on Tuesday canceled two wind projects off the New Jersey coast that were approved for an estimated $1 billion in taxpayer-funded subsidies by Democratic Gov. Phil Murphy and state lawmakers.
Danish company Orsted cited high inflation, rising interest rates and supply chain problems as reasons for scrapping its Ocean Wind 1 and 2 projects, both boosted by tax incentives included in the so-called Reduction Law of President Biden’s Inflation.
“Macroeconomic factors have changed dramatically in a short period of time, with high inflation, rising interest rates and supply chain bottlenecks impacting our long-term capital investments,” the company said in a statement. CEO of Orsted Americas, David Hardy.
“As a result, we have no choice but to halt development of Ocean Wind 1 and Ocean Wind 2. We are extremely disappointed to have to make this decision, particularly as New Jersey is poised to be a U.S. and global hub for offshore wind energy. .”
The Biden administration’s so-called Inflation Reduction Act provides federal tax credits to green energy companies.REUTERS
Murphy, a staunch supporter of the project, infuriated Orsted’s announcement, calling the withdrawal “scandalous” amid the unprecedented accommodations granted by the Garden State to the foreign company.
“Today’s decision by Orsted to abandon its commitments to New Jersey is outrageous and calls into question the company’s credibility and competence,” Murphy said in a statement. “Just a few weeks ago, the company made public statements regarding the feasibility and progress of the Ocean Wind 1 project.”
Murphy would explore legal options regarding the abandoned Orsted project after the state worked hard to secure funding.
Opponents of the Ocean Wind project argued that the huge turbines threaten marine life and could interfere with radar systems.AP
“In recognition of the challenges inherent in large and complex projects, my administration, in partnership with legislative leadership, insisted on important protections that ensure New Jersey will receive $300 million to support the offshore wind sector should the Orsted projects in New Jersey do not move forward,” he added. .
“I have directed my Administration to review all legal rights and remedies and to take all necessary measures to ensure that Orsted fully and immediately meets its obligations.”
The failed project, which would have given the state its first offshore wind farm just 13 miles off the South Jersey shore, was expected to generate enough power to power half a million homes.
In July, New Jersey lawmakers approved $1 billion in tax breaks for Orsted to keep the project going, a move that Republicans, commercial fishermen and activists criticized as a generous subsidy for a potentially damaging environmental project.
Part of the foundation for an offshore wind turbine rests on rollers outside a manufacturing facility in Paulsboro, New Jersey. AP
In exchange for the pamphlet, which allowed Orsted to pocket federal tax breaks that it was initially supposed to return to New Jersey taxpayers, the company had to place a $200 million guarantee in state coffers, which apparently will be returned to taxpayers now that The company has scrapped the project.
State Sen. Ed Durr (R-Gloucester) criticized the subsidy at the time, arguing that when Orsted first received approval to build the wind farms, he “agreed to apply for and return to taxpayers any federal tax incentives that might be available to compensate the subsidy.” higher costs that taxpayers are paying today for the development of wind energy.”
“Despite the agreement they signed, Orsted is realizing that wind farm projects don’t make economic sense without significant government subsidies, so they are now seeking big help at the expense of New Jersey utility customers.” , he added.
Onshore wind turbines in Atlantic City, New Jersey, power up on July 20, 2023. AP
Under the Inflation Reduction Act, renewable energy developers can receive tax credits of up to 30% for qualified investments that use union labor, and more credits if the project meets additional criteria.
Orsted officials were reportedly seeking a 40 percent tax credit to move forward with the project.
The New England Fishermen Management Association, which argued that sustainable fishing and other marine activities off the New Jersey coast were being threatened by the project, welcomed Orsted’s decision and said it was a sign that the Future offshore wind projects would be doomed to failure.
“Billion-dollar cost overruns incurred despite generous donations from the Biden administration and the state of New Jersey will dominate the accounts for these projects’ demise,” the group said in a statement.
Wind turbines that are part of the Jersey-Atlantic Wind Farm, which was the first coastal wind farm in the United States and is located in Atlantic City, New Jersey. Christopher Sadowski
“These fiscal and logistical hurdles are instructive for all states considering a transition to offshore wind. But these challenges should not overshadow consideration of the urgent threat that offshore wind farms pose to fisheries, maritime communities and the marine environment.”
Rep. Chris Smith (R-NJ), another critic of the project, called Orsted’s announcement “a victory for local residents.”
“Governor Murphy abandoned the people of New Jersey by wasting taxpayer money on unsound and inadequately vetted offshore wind projects, even as his own Division of Rate Advisors noted that ratepayers would have to pay higher costs and Orsted would earn more.” money as a result of the billion “The dollar bailout was enacted in July,” Smith told The Post.
“While Orsted’s withdrawal is a victory for local residents, environmentalists, and New Jersey commercial and recreational fishermen who have been subjected to the coercive power of the Biden and Murphy administrations, we are not out of the woods yet. “We must continue this critical fight to protect the Jersey Shore from their ocean industrialization plans that would eviscerate our marine ecosystem, put recreational and commercial fishermen out of work, seriously harm radar navigation, and jeopardize our national security,” added the congressman.
The company said it would move forward with its Revolution Wind project in Connecticut and Rhode Island and its South Fork Wind project in New York despite the cancellation of Ocean Wind 1 and 2.
White House spokesman Michael Kikukawa said in a statement that “momentum remains on the side of an expanding U.S. offshore wind industry,” despite the collapse of the Ocean Wind project.
“While macroeconomic headwinds are creating challenges for some projects, momentum remains on the side of an expanding U.S. offshore wind industry, creating well-paying union jobs in manufacturing, shipbuilding and construction; strengthen the electrical grid; and provide new clean energy resources for American families and businesses,” Kikukawa said.
Categories: Trending
Source: vtt.edu.vn