New Jersey’s Offshore Wind Farm Developer Misses Earnings Expectations

the staff of the Ridgewood blog

Atlantic City NJ, , Denmark’s Orsted (ORSTED.CO), the world’s No. 1 offshore wind farm developer, on Thursday reported second-quarter operating profit below expectations and confirmed its full-year guidance. Second-quarter earnings before interest, tax, depreciation and amortisation (EBITDA) excluding new partnerships fell 8% from a year earlier to 3.32 billion Danish crowns ($489.56 million), compared with the 3.85 billion expected by analysts in a Refinitiv poll. Orsted kept its 2023 forecast for EBITDA excluding new partnerships unchanged at between 20 billion and 23 billion crowns.”However, compared to the guidance provided in our annual report for 2022, we now expect higher earnings in Offshore than initially announced,” Chief Executive Mads Nipper said in a statement. ($1 = 6.7816 Danish crowns)

In June of 2021 ,the New Jersey Board of Public Utilities (BPU) has issued an order awarding Ocean Wind 2 a 20-year OREC (Offshore Renewable Energy Certificate) for its proposed offshore wind farm with a capacity of 1,148 MW. With today’s award, the Ocean Wind lease will be utilized to its maximum capacity of approx 2.3 GW. The 2029 OREC price is USD 84.03 per MWh with a 2% annual escalator.

Ocean Wind 2 is being developed by Ørsted, the world leader in offshore wind development. Ocean Wind 2 will be located adjacent to Ocean Wind (“Ocean Wind 1”), the company’s first New Jersey project which was awarded an 1,100 MW OREC order by the BPU in June 2019. Ocean Wind 1 is being developed by Ørsted in partnership with Public Service Enterprise Group (PSEG) who owns 25% equity in the project.

“As part of its winning proposal, Ocean Wind 2 will deliver several landmark investments that will generate over USD 4.8 billion net benefit for New Jersey and bring the offshore wind supply chain to New Jersey and to the US.”

In June of this year(2023) a bill to let Danish offshore wind energy developer Orsted keep tax credits that it otherwise would have to return to New Jersey ratepayers was approved by the slimmest of margins in the state Legislature Friday afternoon and went to the desk of Gov. Phil Murphy, a strong supporter of offshore wind farms.

The bill to allow Orsted to keep federal tax credits was designed to help counter what lawmakers termed lingering economic effects on the developer from the COVID-19 pandemic and elevated inflation.

It applies to Orsted’s first project in New Jersey, Ocean Wind I, which aims to generate enough electricity to power 500,000 homes.

New Jersey residents have sued Danish renewable energy developer Orsted and the state over a tax break the company received to build a major offshore wind farm in the Atlantic, claiming the estimated $1 billion subsidy violates the state constitution.

New Jersey groups Defend Brigantine Beach and Protect our Coast NJ filed their lawsuit on Thursday in state court in Trenton. They claimed the law authorizing the tax break, signed earlier this month by Governor Phil Murphy, violates a provision of the state constitution that generally prohibits legislation that specifically favors a single, private entity.

The groups asked the court to invalidate the law, which they said created the tax break “for the singular purpose of protecting Orsted from commercial risk it voluntarily assumed” when it submitted bids to develop the project, known as Ocean Wind.

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