New Jersey says will fight 'tooth and nail' for $300M wind farm developer owes in canceling project

A Danish wind developer may have to pay $300 million to New Jersey for canceling a major offshore wind project.

Orsted announced Wednesday that it would not be continuing development of its 2.2 gigawatt, two-phase Ocean Wind project as a result of supply chain delays and rising interest rates.

As part of a $1 billion tax incentive law that Gov. Phil Murphy signed this past summer, Orsted put $200 million into escrow for supply chain and manufacturing investments, according to NJ.com, in addition to a $100 million security, to ensure Ocean Wind would be operational by December 2025.

If that deadline wasn’t met, the total $300 million would go to the state.

Federal tax credits that are ordinarily sent to ratepayers would under state law instead go to Orstead, which would help the company weather supply chain issues and inflation following the pandemic.

Orsted claims that New Jersey’s Board of Public Utilities had not issued a final approval of the compliance filing related to the $300 million, and since the company isn’t moving forward with the project, it was withdrawing its filing and won’t be pursuing the tax incentives.

State officials told NJ.COM that the board approved the filing on Sept. 27.

Murphy said that the state was going to “fight tooth and nail” to get the $300 million from the company, A spokesperson for Murphy told NJ.com Friday that the state plans to take “any and all actions” to ensure Orsted honors its commitments to the state.

When NJ.com asked, Orsted declined to say if it would pursue litigation in the matter.