Ørsted halts New Jersey wind power projects in blow for Biden's energy plans

Ørsted announced Tuesday it will cease work on two U.S. offshore wind projects in New Jersey.

Why it matters: The world's largest wind energy developer halting these projects, Ocean Wind 1 and 2, is a blow to President Biden's clean energy drive to cut emissions, which includes the goal of reaching 30 gigawatts of offshore wind-generating capacity in U.S. waters by 2030.

• It's also a setback for New Jersey Gov. Phil Murphy's (D) plans for the state to be 100% clean energy by 2035 and N.J. Democrats trying to hold onto majorities in the Legislature as wind power becomes a flashpoint in the Nov. 7 elections.

Driving the news: "Macroeconomic factors have changed dramatically over a short period of time, with high inflation, rising interest rates, and supply chain bottlenecks impacting our long-term capital investments," said David Hardy, Ørsted's Americas CEO.

• "As a result, we have no choice but to cease development of Ocean Wind 1 and Ocean Wind 2."

What they're saying: White House spokesperson Michael Kikukawa tells Axios in an emailed statement that "momentum remains on the side of an expanding U.S. offshore wind industry," citing nearly $8 billion in offshore wind investments since Biden signed his signature Inflation Reduction Act.

• "From day one, the Biden-Harris Administration has used every available tool to advance the growing American offshore wind industry, and we are seeing the results," he adds.

Thought bubble, via Axios' Ben Geman: This is perhaps the starkest evidence yet of economic hurdles undercutting White House hopes for a major U.S. offshore wind buildout.

• The tech has potential to play a role cutting U.S. emissions, but a combination of interest rates, inflation, supply chain challenges and more are slowing offshore wind down even as several projects move forward.

Of note: Ørsted will proceed with its Revolution Wind project in Connecticut and Rhode Island, per a company statement.

Go deeper: New design for offshore wind farm has lots of fans