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Orsted, Offshore Wind Firm, Cancels N.J. Projects

Plans to build two wind farms off the coast of New Jersey were scrapped on Wednesday, the company behind them said, a blow to the state’s efforts to cut greenhouse gas emissions and the latest shakeout in the U.S. wind industry.

The move, which will force Orsted, a Danish company, to write off as much as $5.6 billion, will crimp the Biden administration’s plans to make the wind industry a critical component of plans to reduce greenhouse gas emissions. High inflation and soaring interest rates are making planned projects that looked like winners several years ago no longer profitable.

“The world has in many ways, from a macroeconomic and industry point of view, turned upside down,” Mads Nipper, Orsted’s chief executive, said on a call with reporters on Wednesday.

The two projects, known as Ocean Wind 1 and 2, were destined to provide green energy to New Jersey. They were strongly backed by the state’s governor, Phil Murphy, a Democrat with national ambitions who stresses his environmental credentials but who has lately drawn scorn for falling short in combating climate change. On Wednesday he suggested that Orsted was a dishonest broker and insisted that the “future of offshore wind” along the state’s 130-mile coastline remained strong.

Consumers will also probably pay more in their electric bills for power generated from offshore wind, as developers demand higher prices and protection from inflation.

Jeff Tittel, a longtime New Jersey environmental advocate and former director of the Sierra Club’s state chapter, said Orsted’s pullout was a considerable setback for the state’s efforts to generate more green energy.

“There’s really not a Plan B right now,” he said. “It’s a political disaster.”

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