Oil giant Shell withdraws from the Atlantic Shores wind project off New Jersey, citing market changes and regulatory uncertainty. The project's future remains unclear.
In a significant setback for offshore wind energy development, oil and gas giant Shell has announced its withdrawal from the Atlantic Shores project off the coast of New Jersey . Shell cited increased competition, project delays, and a shifting market as primary reasons for the decision, noting that regulatory context was also taken into consideration. The company co-owns the Atlantic Shores project with EDF-RE Offshore Development, which has secured most of its necessary permits.
If both phases of the project were completed, it would generate enough electricity to power one million homes, representing one-third of New Jersey households. While Shell's exit casts uncertainty over the project's future, EDF-RE Offshore Development maintains its commitment to Atlantic Shores. Shell's decision comes amidst a lingering cloud of uncertainty surrounding offshore wind energy projects in the US, stemming from former President Donald Trump's early actions against this sector. On his first day in office, Trump signed an executive order targeting offshore wind development, imposing a temporary halt on all lease sales in federal waters and suspending approvals, permits, and loans. The order also directed federal officials to review existing offshore wind energy leases and identify potential legal grounds for their termination. This policy shift created a climate of apprehension for developers like Shell.While large offshore wind farms have been successfully operating in Europe and Asia for decades, the US has lagged behind in this sector. Offshore wind energy is widely recognized as a crucial component in addressing climate change, as it can replace fossil fuel-based power plants when paired with battery storage. New Jersey, aiming to transition to 100% clean energy by 2035, had high hopes for the Atlantic Shores project. However, the Biden administration's approval of the project in two phases in October 2023 did not immediately translate into construction, as the project faced significant uncertainty regarding its lease and the broader regulatory landscape. Experts and industry observers are closely monitoring the situation, recognizing the potential implications for future offshore wind development in the US. Shell's withdrawal, coupled with Danish wind developer Orsted's recent decision to abandon two offshore wind farms in New Jersey due to economic concerns, highlights the challenges faced by developers in navigating the complex and evolving regulatory environment. The cost of offshore wind energy, while declining, remains higher than some other renewable energy sources, making it more susceptible to market fluctuations and policy uncertainties.
OFFSHORE WIND SHELL ATLANTIC SHORES NEW JERSEY CLIMATE CHANGE ENERGY POLICY REGULATORY ENVIRONMENT
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