Orsted Drops 966 MW Skipjack Wind Project Amid Challenging Market Conditions

Orsted business

Orsted, a leader in renewable energy, has announced the repositioning of its Skipjack Wind project. The project, boasting a combined capacity of 966 MW, is currently under development off the coast of the Delmarva Peninsula in the United States.

Following consultations with the State of Maryland, Orsted has decided to withdraw from the Maryland Public Service Commission orders that had previously approved the Skipjack 1 and 2 projects. Despite this withdrawal, Orsted remains committed to advancing the development and permitting processes for the combined Skipjack Wind project. This includes the submission of an updated Construction and Operations Plan to the Bureau of Ocean Energy Management (BOEM).

The decision to withdraw from the Maryland orders stems from a thorough review, revealing that the payment amounts for Offshore Renewable Energy Credits (ORECs) specified in the orders are no longer commercially viable. This change is attributed to the challenging market conditions characterized by factors such as inflation, high interest rates, and supply chain constraints.

“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’s highly supportive of offshore wind, for future offtake opportunities,” David Hardy, Executive Vice President and CEO of Region Americas at Orsted, said.

While reevaluating the best path forward for Skipjack Wind, Orsted continues to advance, build, and invest in various offshore wind projects in the United States. The South Fork Wind project, in partnership with Eversource, is on track to achieve full operation in the coming weeks, marking the first commercial-scale offshore wind farm in America.

Construction activities for Revolution Wind, another Orsted project with Eversource delivering power to Rhode Island and Connecticut, have already commenced. Additionally, Sunrise Wind, serving New York, has been resubmitted in the New York 4 solicitation, potentially enhancing its financial position.

Orsted maintains valuable uncontracted seabed along the U.S. East Coast, strategically positioned to contribute to the growth of the U.S. offshore wind industry. With approximately 10 GW of offshore wind energy expected to be awarded in the Northeast this year, and additional solicitations anticipated in the Mid-Atlantic in the next 1-2 years, Orsted remains a key player in advancing the renewable energy landscape in the region.