Maryland's nascent offshore wind energy industry announced late Thursday that one of two companies planning to install wind turbines off the coast of Ocean City is “relocating” its plans, abandoning its agreement with the state and replacing it. The government received a huge blow when it announced that it would explore ideas. Financial arrangements to continue the project.
Ørsted, the world's largest offshore wind developer, emphasized it remains committed to building projects in federal waters, but opted out of an agreement with the Maryland Public Service Commission aimed at financing clean energy. Then he said. Fund development. Although the company will continue to seek federal permits for its proposed wind farms and continue to develop construction and operating plans in Maryland, the current financial condition of the offshore wind industry means that He said it was impossible to continue. .
In a statement late Thursday, Ørsted said the expected revenue from the state's clean energy credit, which caps the amount the company can charge wind power ratepayers, would be “considered by today's current climate trends such as inflation, high interest rates, and low interest rates. “Due to difficult market conditions, it is no longer commercially viable.” Supply chain constraints. ”
Through two separate but adjacent state-approved leases known as Skipjack 1 and Skipjack 2, Ørsted is ticketed to supply 966 megawatts of wind energy starting later this decade. Company executives said Orsted is determined to work with state officials, potential investors and other stakeholders to find better ways to fund and preserve the project.
“Today’s announcement confirms our commitment to developing value-creating projects, located on strategically valuable federal leases and partnering with states that are highly supportive of offshore wind. “This is an opportunity to reposition Katsuo Wind for future generation opportunities,” said David Hardy. Group Executive Vice President and CEO Americas of Ørsted. “As we explore the best path forward for Katsuo Wind, we anticipate several opportunities and will evaluate each as they become available. We continue to advance our development milestones.”
Mr Hardy said the Danish company was exploring “future offtake opportunities”, adding that Ørsted could find new sources of funding, new investors, new government programs that could generate additional capital, power consumption He suggested that he is exploring a new fee system for customers, or a combination of these. .
Carter Elliott IV, a press secretary for Gov. Wes Moore (D), who has vowed to make Maryland a leader in offshore wind development, said in a statement that the governor “has the ability” to make this news. “I was disappointed,'' he said. It will impact the lives of so many Marylanders. ”
“However, members of Congress who see Maryland's potential to build a system that will help Maryland reach its state goal of 100% clean energy by 2035, We continue to work with our partners, offshore wind developers and advocates,” Elliott said. “If this is to be Maryland's decade, we must continue to make progress toward achieving our state's ambitious climate change goals, and the Governor remains committed to making that happen. ”
Mr. Ørsted's announcement is not at all surprising. The company abandoned plans to build two offshore wind farms off the coast of New Jersey in the fall, indicating at the time that it was reevaluating its efforts in Maryland. Last year, it also sought a revised contract for a proposed offshore wind project off the coast of Long Island, but the New York Public Service Commission rejected the petition, saying it would be too expensive for ratepayers. Throughout its activities over the past year, the company has cited “macroeconomic challenges” facing the entire industry.
But it's not at all clear where the Maryland debate goes from here.
The Public Service Commission, which awarded the Maryland lease to Orsted and a second company, US Wind, and regulates utility companies, will play a role in what happens next.
“Today's news from Orsted is disappointing. The skipjack project has been a critical component in advancing Maryland's clean energy goals,” PSC Chairman Fred Huber said in a statement. “However, the Commission remains optimistic about the future of Maryland's offshore wind industry and will note that U.S. wind projects continue to go through the federal approval process.”
Just last year, the Legislature passed a bill increasing the state's offshore wind energy goals. One provision of the law allows the Public Service Commission to lift caps on wind energy developers' ability to receive federal incentives. It also authorizes the PSC to conduct an analysis of expansion options for offshore wind transmission systems and directs the Maryland Department of General Services to solicit bids for transmission projects, thereby improving the economic The burden may be reduced.
“What this means is that there are other options for building offshore wind in Maryland,” said Del Lorig Chalk, the House lead sponsor of last year's offshore wind expansion bill. Dean (D-Montgomery) said in an interview Thursday night.
Charkudian noted that state officials are just beginning to absorb Ørsted's announcement, which he acknowledged “could again slow the market for offshore wind.”
It remains to be seen whether additional legislation will be needed this year to rescue the project, or whether the Moore administration will enter into tough negotiations with the company.
“I think we're going to get a lot of information and a lot of conversations about this over the next few days,” Charkoudian said.
Orsted has already made significant investments in Maryland to support offshore wind projects in the Mid-Atlantic, including $13 million in port development for the Tradewind Atlantic industrial project in Dundalk. This will make it possible to transport the heavy goods needed to construct wind turbines. and $5 million to renovate East Coast steel mills.
These facilities may also be available to other offshore wind companies whose services may be available.
“We are grateful for the steadfast partnership and support of Governor Moore, the Maryland Public Service Commission, and the State of Maryland as they worked diligently to develop skipjack wind power during difficult economic times,” said Ørsted executive Hardy. Stated. “We fully support the state’s leaders in pursuing their ambitious offshore wind goals. We also thank Delaware for taking a collaborative approach to supporting the development of Skipjack Wind. I would also like to thank you.”
US Wind plans to build a steel mill at Tradepoint Atlantic for regional operations.
Just last Saturday, U.S. Rep. Andy Harris (R-1), a staunch opponent of offshore wind power, was in Ocean City with two of his Republican colleagues from coastal New Jersey, who have also fought wind power development in the state. A public meeting was held. The meeting drew many people who opposed the project, including Ocean City Mayor Rick Meehan.
“Last Saturday, we held a public event in Ocean City, Maryland, calling for an end to offshore wind industrialization in Maryland,” Harris said on X (formerly Twitter) Thursday night. “Today, Orsted withdrew its offshore wind contract with the State of Maryland. Federal regulatory agencies have an agenda for offshore wind, but this country is not made up of regulatory agencies, and It's made up of the American people, who have a much stronger voice than the wind companies.”
This bulletin has been updated.
