Ørsted announces pullback in Maryland offshore wind plan as 'no longer commercially viable'

Just days after Rep. Andy Harris, R-Md-1st, held a hearing on offshore wind energy in Ocean City, Ørsted has announced plans to step away from state agreements approving its development off Maryland.

In a statement by the company on Thursday, it announced it will reposition Skipjack Wind, a combined 966-megawatt project in development off the coast of the Delmarva peninsula, "for future offtake opportunities." Following consultation with the state of Maryland, Ørsted has withdrawn from the Maryland Public Service Commission Orders approving the Skipjack 1 and 2 projects.

Ørsted intends to continue advancing development and permitting for the combined project, including submission of its updated Construction and Operations Plan to the federal Bureau of Ocean Energy Management.

“Today’s announcement affirms our commitment to developing value creating projects and represents an opportunity to reposition Skipjack Wind, located in a strategically valuable federal lease area and with a state that is highly supportive of offshore wind, for future offtake opportunities,” said David Hardy, Group Executive Vice President and CEO Americas for Ørsted.

Ørsted says Skipjack agreement 'no longer commercially viable'

Hardy noted the company will continue to "explore the best path forward for Skipjack Wind," and they anticipate several opportunities and will evaluate each as it becomes available. Hardy doubled down on the company's commitment to Skipjack Wind’s development milestones, including its Construction and Operations Plan.

By stepping back and reassessing the Offshore Wind Renewable Energy Certificate, the company is stepping away from the funding mechanism in place for the Skipjack Developments. This move follows an extensive review of the agreement, with the company citing the payment amounts for the certificate are "no longer commercially viable because of today’s challenging market conditions, including inflation, high interest rates and supply chain constraints."

“We are grateful to Gov. Moore, the Maryland Public Service Commission and the state of Maryland for their steadfast partnership and support as we have worked diligently to develop Skipjack Wind under challenging economic circumstances,” Hardy said.

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What now for Maryland's green energy goals?

For their part, the Moore Administration has called for 100% clean energy by 2035 and announced that the Maryland Energy Administration will offer more than $6 million in Fiscal Year 24 funding through its Maryland Offshore Wind Grant Program Portfolio, designed to help Maryland’s emerging businesses and workforce get involved in the growing offshore wind industry.

“Gov. (Wes) Moore is disappointed by the news of Ørsted’s repositioning of the Skipjack Wind project,” said Carter Elliott IV, a press secretary in the executive office of the governor.

Elliott noted the governor will continue to work with legislators, Maryland’s federal partners, offshore wind developers and advocates to ensure the state reaches the goal of 100% clean energy.

Sen. Cardin addresses issue in discussion with lawmakers

Sen Ben Cardin addressed the new development in wind energy with members of the Eastern Shore delegation to the Maryland General Assembly during a weekly delegation meeting Friday held by Zoom.

“They say they’re not out of the business, they want to take a fresh look at it,” said Cardin, D-Md. “I interpret that (announcement) that they cancelled it for the time being. That’s extremely disappointing cause we would like to see it go forward. We’ll be totally engaged with you, the members of the General Assembly, as well as the governor to see whether we can find solutions to meet the local needs."

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Maryland move comes along big changes in New Jersey, elsewhere

According to Ørsted, "macroeconomic factors" are impacting offshore wind projects globally leading the company to pull out of a billion-dollar New Jersey-based offshore wind project in November of last year.

Ørsted continues to work with Eversource, its South Fork Wind project serving New York is set to reach full operations in the weeks ahead as the first commercial-scale offshore wind farm in America. Revolution Wind, also with Eversource and delivering power to Rhode Island and Connecticut, has already started construction activities.

While the company was reassessing development in Maryland, earlier this year on Jan. 2, wind turbines off the coast of Martha’s Vineyard, Massachusetts, began sending electricity ashore, reported The Boston Herald, a moment described by local officials, including that state’s governor, as “historic.”

“This is a historic moment for the American offshore wind industry,” said Massachusetts Gov. Maura Healey, a Democrat, in a release.

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Harris declares move by Ørsted a victory

Harris continued his opposition following the Ocean City hearing, characterizing the withdrawal by the offshore wind company as a win for residents of Ocean City.

“Last Saturday, we held a public event in Ocean City calling for an end to offshore wind industrialization in Maryland. Today, Ørsted withdrew their offshore wind deal with Maryland. Federal regulatory agencies have an agenda with offshore wind, but this country is not made up of regulatory agencies — it’s made up of the American people whose voices are much more powerful than foreign owned offshore wind companies," Harris said in an emailed statement.

Harris continued to note the move was "welcomed news for the many watermen and residents in Maryland who have made it clear they don’t want foreign owned offshore wind companies industrializing their coasts.”

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Dwight A. Weingarten contributed reporting to this article.

This article originally appeared on Salisbury Daily Times: Maryland offshore wind suffers big setback with Ørsted change of course