ANNAPOLIS, Md. - Ørsted's Skipjack Wind, a combined 966-megawatt wind farm project in development off the coast of the Delmarva peninsula, has withdrawn from Maryland Public Service Commission orders. It is repositioning for future opportunities due to funding concerns, the company announced Thursday afternoon.
This withdrawal comes following consultation with the State of Maryland and an extensive review of the orders. According to Ørsted, the payment amounts for offshore renewable energy certificates set forth in Maryland were no longer commercially viable due to challenging market conditions like inflation, high interest rates and supply chain constraints.
"As we explore the best path forward for Skipjack Wind, we anticipate several opportunities and will evaluate each as it becomes available," said David Hardy, group executive vice president at Ørsted. "We will continue to advance Skipjack Wind's development milestones, including its construction and operations plan."
Skipjack Wind is located in a strategically valuable federal lease area. Though it is repositioning this project, Ørsted intends to continue advancing development and permitting, including submitting updated plans to the Bureau of Ocean Energy Management. Hardy went on to say Ørsted remains committed to developing value-creating projects and that this repositioning represents an opportunity for future offtake opportunities.
WHAT REPOSITIONING MEANS
Ørsted is continuing to develop the Skipjack Wind in its current location but is seeking different funding opportunities. It has withdrawn from Maryland's offshore renewable energy credit order, meaning it will likely seek private or other methods of funding as opposed to association with the state.
"We fully support the state's leadership as they pursue their ambitious offshore wind goal. We also thank the State of Delaware for its collaborative approach to supporting Skipjack Wind's development," Hardy said.
ØRSTED'S REGIONAL PROJECTS
Though Ørsted says economic factors are impacting offshore wind projects globally, it is continuing to work on several U.S. projects. Ørsted is working with partner Eversource on a New York project called South Fork Wind, which is set to reach full operations in the coming weeks as the first commercial scale offshore wind farm in America.
Sunrise Wind, also serving New York, was resubmitted in solicitations on Thursday. The company says, if awarded, this would improve the project's financial position and advance the most mature offshore wind project in the state's pipeline. Up the coast, construction has also started on Revolution Wind, a project to deliver power to Rhode Island and Connecticut.
Despite the progress on these projects, Ørsted previously pulled out of two offshore wind projects in New Jersey for concerns similar to those in Maryland relating to rising interest rates and supply chain delays.
In a statement from the Governor's office CoastTV, Maryland Governor Wes Moore said he was dismayed with the decision, saying quote:
"Governor Moore is disappointed by the news of Ørsted’s repositioning of the Skipjack Wind project, an effort that has the capacity to impact the lives of so many Marylanders.
However, he will continue to work with legislators, Maryland’s federal partners, offshore wind developers, and advocates that see Maryland’s potential in order to build a system to help Maryland reach the state’s goal of 100% clean energy by 2035.
If this is going to be Maryland's decade, we must continue to push forward to reach the state's ambitious climate goals, and the governor is as committed as ever to doing just that."