Democrats in New Jersey and Connecticut approved hundreds of millions of dollars in taxpayer funds to incentivize a Danish green energy company to build offshore wind farms. Now, the company is facing billions in lost value and may need to scrap the projects.
Denmark's Orsted, the world's largest offshore wind company, on Wednesday announced it's facing supply chain problems and other issues that could cause it to take a $2.3 billion hit to its U.S. portfolio. The company's issues are so significant, Orsted's chief executive said, that the foreign green energy giant could "walk away from projects" in the United States.
That announcement is likely concerning for Democrats in New Jersey and Connecticut, two blue states that are using taxpayer cash to attract Orsted to build wind farms off their coasts. New Jersey Democratic governor Phil Murphy in July signed a bill that approved nearly $1 billion in subsidies for Orsted to install wind turbines off the coast of Atlantic City. Connecticut Democratic governor Ned Lamont, meanwhile, funneled tens of millions of taxpayer dollars toward public pier renovations to help accommodate an Orsted wind farm. Those projects are now in question.
Murphy, Lamont, and Orsted did not return requests for comment.
This is far from the first time a highly touted green energy company has encountered serious financial struggles despite receiving support from liberal lawmakers. Earlier this month, Proterra—an electric vehicle company that the Biden administration repeatedly promoted—declared bankruptcy, citing "various market and macroeconomic headwinds." Proterra shares subsequently tumbled more than 60 percent, but only after Energy Secretary Jennifer Granholm sold her shares in the company for $1.6 million.
Orsted’s shares also took a large hit following Wednesday’s announcement, with the foreign company losing a quarter of its market value. Consulting firm Wood Mackenzie expects other green energy companies to suffer similar fates. "This will not be the last that we will see this year," Soeren Lassen, the firm’s head of offshore wind, told the New York Times.
Orsted’s project created bipartisan controversy in New Jersey even before the company's financial woes. The state’s top Democrats are questioning the higher energy costs associated with the project—state House speaker Craig Coughlin and state Senate president Nick Scutari in an August joint statement cited the "many unanswered questions about the economic impact these projects will have on ratepayers."
President Joe Biden’s support for failed green energy companies extends beyond his presidency. As vice president, Biden heaped praise on solar energy company Solyndra, which received a $535 million loan from the Obama-Biden administration. Solyndra went on to declare bankruptcy.