The future of wind power off the coast of New Jersey is further being called into question as another project is canceled by developers.

Empire Wind 2 was to be built off the coast of New Jersey in the Long Island Sound with the capacity to generate 1,260 megawatts of electricity.

On Wednesday Equinor and British Petroleum announced they were ending their agreement with the New York State Energy Research and Development Authority and cancelling the project.

Offshore Wind Tax Credit
New Jersey Gov. Phil Murphy signs a bill in Paulsboro, N.J., Thursday, July 6, 2023, granting a tax break to offshore wind energy developer Orsted. (AP Photo/Wayne Parry)

The company cited several factors that led to the decision to cancel the project, including inflation, interest rates, and supply chain disruptions.

Those issues, company officials said, prevent the Empire Wind 2 project from being "viable." However, the company says it remains strongly committed to future offshore wind projects.

"Commercial viability is fundamental for ambitious projects of this size and scale," said Molly Morris, President of Equinor Renewables Americas, "The Empire Wind 2 decision provides the opportunity to reset and develop a stronger and more robust project going forward."

Morris did not, however, give any details about future projects.

Another blow to Gov. Phil Murphy's green agenda

Many industry experts expected the Empire Wind 2 project to suffer the same fate as the Ocean Wind 1 and Ocean Wind 2 projects off the South Jersey Shore.

Developer Ørsted announced last October they were canceling both projects.

It was a stunning defeat for Gov. Phil Murphy who was a vigorous supporter of the company and offshore wind projects to help power his zero emissions goal.

The cancellation was a huge blow to those goals and came just weeks after the company offered a $300 million guarantee to New Jersey if they failed to build the planned projects.

attachment-I remain committed to ensuring that New Jersey becomes a global leader in offshore wind .

Murphy was furious and vowed to recoup that money and more. "I have directed my Administration to review all legal rights and remedies and to take all necessary steps to ensure that Orsted fully and immediately honors its obligations," Murphy said in a statement.

The governor has yet to offer an update or say if any of that money has been recovered for taxpayers.

Orsted has been trying to get out of that guarantee.

Wind projects fraught with controversy

While Murphy, legislative Democrats, and environmentalists aggressively promoted the benefits of offshore wind projects, Republicans, members of the public, and local government officials were equally opposed.

Shore towns expressed concerns about the impact on tourism.

Republicans worried about the cost and the potential impact on marine life.

But even support from key Democrats had begun to fade in recent months.

AP/Townsquare Media illustration
AP/Townsquare Media illustration

New Jersey Senate President Nick Scutari and Assembly Speaker Craig Coughlin put out a statement questioning the state's commitment and the cost. They had suggested pausing development for more study of the impact.

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