In another setback for New Jersey’s offshore wind industry, the state Board of Public Utilities on Monday cancelled the bidding process for the state’s fourth offshore wind solicitation, citing the uncertainty driven by recent federal actions affecting the industry.
There originally had been three bidders last year for the fourth offshore wind solicitation, a process by which the state seeks proposals from developers for projects that, if selected, would be eligible for state financial backing through grants, loans and other financial incentives. However, two of the three interested companies dropped out leaving, only Atlantic Shores.
“A number of reasons led to this decision, notably Shell backing out as an equity partner in the Atlantic Shores project and backing away from the American clean energy market, as well as uncertainty driven by federal actions and permitting,” BPU President Christine Guhl-Sadovy said on Monday in a statement explaining why the BPU had cancelled the bid process.
The Atlantic Shores project, which would construct two wind farms in federal waters 8.7 miles off the Atlantic City coast, received the federal permits it needed during the final months of former President Joe Biden’s administration. However, executive orders issued after President Donald Trump took office on Jan. 20 have caused confusion in the clean energy industry.
Trump’s EOs have temporarily withdrawn federal waters from consideration for offshore wind development and paused the issuance of new permits, approvals, and loans for all onshore and offshore wind projects.
Shell, which was a 50-50 partner in the Atlantic Shores wind farms, said last week it was exiting the project because it no longer aligned with the energy giant’s return goals and that it would seek to monetize its stake in the project. The company’s Q4 earnings report included $2.2 billion in impairments, including a $1 billion write-off for Atlantic Shores. A Shell spokesperson later told the Associated Press it took “regulatory context into consideration” in the decision.
Atlantic Shores CEO Joris Veldhoven said the company remained committed to the promise of offshore wind but was disappointed by the BPU decision.
“We’re discouraged to see the conclusion of this solicitation without an awarded project,” Veldhoven said. “Atlantic Shores Project 1 holds distinct advantages of an advanced permitting program, existing supply chain investments already putting people to work, a mature interconnection plan, and a clear path to financing that made us the most competitive and deliverable project proposed in NJ4.
“The Governor’s commitment to reaching 100% clean energy by 2035 is genuine and commendable. Today’s announcement clearly puts this goal at risk, Veldhoven said. “We look forward to working together during this dynamic and evolving landscape to identify future offtakes and opportunities to serve millions of homes with safe, reliable, renewable power.”
Gov. Phil Murphy issued a statement on Monday saying he supported the BPU’s move canceling the offshore wind solicitation, calling it a prudent decision because the offshore industry is now facing significant challenges.
“Developing the offshore wind industry in New Jersey is a once-in-a-generation opportunity to create tens of thousands of jobs, drive an entirely new manufacturing supply chain, and secure energy independence,” Murphy said. “However, the offshore wind industry is currently facing significant challenges, and now is the time for patience and prudence.”
“I support the BPU’s decision on the fourth offshore wind solicitation, and I hope the Trump administration will partner with New Jersey to lower costs for consumers, promote energy security, and create good-paying construction and manufacturing jobs,” Murphy added.
Separately, the New Jersey Economic Development Authority said Monday the state is exploring alternative uses for the New Jersey Wind Port currently being built in Lower Alloways Creek in Salem County.
“In light of the significant uncertainties in the offshore wind market, we have decided to accelerate our strategic review of options and alternatives for the New Jersey Wind Port,” Sullivan said in a statement issued Monday by NJEDA.
“While recent developments at the federal level and announcements from offshore wind developers are deeply disappointing, they were not unexpected. We have taken a cautious approach to further development of the port since 2023, and we have worked to identify alternative uses that would maximize the economic development, job creation, and financial potential of the site for the state.
“We remain believers in the long-term potential of offshore wind for New Jersey, but our role as stewards of taxpayer resources requires us to evaluate all of our options,” Sullivan said.