In a significant development impacting Maryland’s green energy agenda, multinational energy developer Ørsted has withdrawn from agreements to develop two large offshore wind projects. The decision to pull out of the Skipjack Wind 1 and Skipjack Wind 2 projects was announced by David Hardy, Ørsted’s Group Executive Vice President and CEO of its Americas division, citing “challenging economic circumstances.”
The move by Ørsted, which comes amid a broader shift in the offshore wind energy sector, has dealt a major blow to the state’s decarbonization efforts. Maryland Democrats had pointed to the Skipjack Wind development as a key component of the state’s aggressive climate goals. The projects were selected for a 20-year Offshore Renewable Energy Credit (OREC) by the Maryland Public Service Commission (PSC).
Hardy’s statement indicated that market conditions, including inflation, high interest rates, and supply chain constraints, have rendered the ORECs set forth under the agreement with Maryland commercially unviable. Ørsted, however, has not canceled the project altogether and plans to continue advancing its development and permitting.
The Skipjack Wind projects, located near the Maryland-Delaware border, were projected to have a combined capacity of 966 megawatts and commissioned by 2026. The withdrawal leaves Maryland with just two proposed offshore wind projects: the 300-megawatt MarWin and the 800-megawatt Momentum Wind, both off the coast of Ocean City, Maryland.
Maryland PSC Chairman Frederick Hoover expressed disappointment but remained optimistic about the future of offshore wind in the state. Democratic Maryland Governor Wes Moore’s spokesperson Carter Elliott stated, “Governor Moore is disappointed by the news…however, he will continue to work with legislators, Maryland’s federal partners, offshore wind developers, and advocates to help Maryland reach the state’s goal of 100% clean energy by 2035.”
Republican Maryland Rep. Andy Harris welcomed the decision, which aligns with the concerns of many residents and watermen who opposed the industrialization of their coasts by foreign-owned offshore wind companies.
The recent developments underscore the complexities and challenges facing the implementation of green energy initiatives, particularly in light of economic uncertainties and the ambitious targets set by states and the Biden administration. As Maryland reassesses its path forward, the viability and sustainability of offshore wind projects remain key considerations in the pursuit of clean energy goals.