Danish energy giant Ørsted has announced its withdrawal from an agreement with regulators in Maryland, US, to sell electricity from its 966MW Skipjack Wind project.

The decision comes after a comprehensive review of the Maryland Public Service Commission’s orders.

The company stated that the payments for offshore renewable energy credits, as stipulated by the Maryland Public Service Commission, are no longer sustainable under current market conditions, which include inflation, high interest rates and supply chain constraints.

Despite withdrawing from the agreement, Ørsted remains committed to Skipjack Wind’s continuing development and permissions.

The company plans to submit an updated construction and operations plan to the BOEM.

Ørsted Americas region executive vice-president and CEO David Hardy stated: “Today’s announcement affirms our commitment to developing value-creating projects and represents an opportunity to reposition Skipjack Wind, located in a strategically valuable federal lease area and with a state that is highly supportive of offshore wind, for future offtake opportunities.  

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“As we explore the best path forward for Skipjack Wind, we anticipate several opportunities and will evaluate each as it becomes available. We will continue to advance Skipjack Wind’s development milestones, including its construction and operations plan.” 

“We are grateful to Governor Moore, the Maryland Public Service Commission and the State of Maryland for their steadfast partnership and support as we have worked diligently to develop Skipjack Wind under challenging economic circumstances.”

Since 2017, Ørsted has been working with local businesses to develop the project, which is Maryland’s inaugural offshore wind investment and will be situated off the Delmarva Peninsula coast.

Alongside its partner Eversource, it is also nearing full operation of the South Fork wind project with 132MW of capacity.

To be located offshore New York, South Fork will be the US’ first commercial-scale offshore wind farm.

Construction activities have already commenced on the 704MW Revolution Wind, delivering power to Rhode Island and Connecticut.

In October 2023, the company agreed to sell a 50% stake in the 253MW German offshore wind farm Gode Wind 3 to Glennmont Partners for €473m ($498m).

The deal includes the price of the acquisition along with a commitment to finance 50% of the construction cost.