Political uncertainty surrounding offshore wind in the U.S. and the withdrawal of project partner Shell led EDF Renewables to book a $980 million impairment associated with Atlantic Shores Offshore Wind, the company said in a Friday report.
Atlantic Shores Offshore Wind was a joint venture between Shell and EDF until Shell exited last month and booked a $1 billion impairment associated with the investment. The venture was developing the 2.8-GW Atlantic Shores 1 and 2 projects offshore New Jersey.
On Atlantic Shores’ website, the project responded to Shell’s exit with a Jan. 30 statement that said, “While we can’t comment on the views of shareholders, Atlantic Shores intends to continue progressing New Jersey’s first offshore wind project and our portfolio in compliance with our obligations to local, state and federal partners under existing leases and relevant permits.”
However, the New Jersey Board of Public Utilities responded to Shell’s decision by canceling the state’s fourth offshore wind solicitation earlier this month.
“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,” NJBPU President Christine Guhl-Sadovy said in a Feb. 3 release. “The Board concluded that an award in New Jersey's fourth offshore wind solicitation, despite the manifold benefits the industry offers to the state, would not be a responsible decision at this time.”
After EDF’s writedown of its own stake, the project’s fate is left unclear. The 1.5-GW Atlantic Shores 1 had received a construction and operations plan approval from the Bureau of Ocean Energy Management in October, and completion was slated for 2028.
EDF said “unfavourable changes in the political situation in the United States, Shell’s announcement of its withdrawal from the joint venture, and the decision by the State of New Jersey …. to cancel the tender for which ASOW had bid its most advanced project” led the company to make the decision to book an impairment of 934 million euro, or $980 million.
