Cape May County Ends Litigation Over Failed Wind Energy Project

Cape May County has ended its legal battle against a proposed offshore wind energy farm after the state and federal agencies that had supported the project admitted it is “dead and will not be coming back to life.”

The county had filed state and federal lawsuits to block the wind farm proposed by the Danish energy company Orsted 15 miles off the coast between Atlantic City and Stone Harbor.

In the suits, the county alleged that the project would have caused far-reaching economic and environmental harm to the tourism industry, commercial fishing, migratory birds and marine life such as dolphins and whales.

“By Orsted’s own calculation, Cape May County was facing a loss of over $1 billion in tourism revenue. Our fisheries industry was facing millions of dollars in losses. Marine mammals and other sea life were threatened with injury and harassment,” Cape May County Board of Commissioners Director Leonard Desiderio said in a news release Monday announcing the end of the litigation.

“After what we saw last summer in Nantucket, where beaches were closed in July due to the disintegration of a single turbine blade, we should thank God that we were able to play a role in stopping the Orsted projects,” Desiderio said of another wind farm project off the coast of Massachusetts.

   Cape May County Board of Commissioners Director Leonard Desiderio said the proposed wind farm could have cost the county $1 billon in tourism revenue.   

On October 31, 2023, Orsted announced that it was abandoning its Ocean Wind One and Ocean Wind Two projects off the South Jersey coast, citing inflation, rising interest rates and supply-chain disruptions for its decision.

Orsted then spent nearly a year negotiating with New Jersey for the return of $300 million that the company had paid into escrow with the New Jersey Board of Public Utilities, or NJBPU.

Last July, the state agreed to return $175 million to Orsted, but required Orsted to have the NJBPU vacate its orders granting the company the right to build both the Ocean Wind One and Ocean Wind Two projects off of Cape May County.

“We reached a point where Orsted, the Department of Justice on behalf of federal agencies and the New Jersey Attorney General on behalf of NJBPU all admitted in court filings that Orsted’s Ocean Wind One offshore wind project is dead and will not be coming back to life,” said Michael Donohue, who served as lead attorney in Cape May County’s litigation.

   Attorney Michael Donohue headed Cape May County's legal strategy against the wind farm project.   

The Department of Justice admitted that the cancellation of the NJBPU’s easements and permit precludes the construction of the projects, according to Donohue.

Consequently, the Office of the New Jersey Attorney General, in a brief to the Appellate Division of the New Jersey Superior Court, determined that these were no longer qualified offshore wind projects. The Attorney General also determined that Orsted had fully abandoned the projects and that the projects no longer have authorization to, and cannot, proceed. 

Orsted joined in the motions to dismiss, essentially admitting that the projects will never be built, according to the county’s news release.

The county agreed to the dismissal of the federal appeal as well as the appeal from the actions of the NJBPU and its challenge of Orsted’s right to file easements taken from the county, since it is clear that Orsted has fully abandoned the projects and has no intention of ever constructing them, the release said.

While Orsted retains the lease areas for the offshore wind projects, the Bureau of Ocean Energy Management has suspended the Ocean One lease area for three years. There are no current plans by any offshore wind developer for the use of the lease areas. Orsted has also indicated that it intends to abandon its Skipjack project that was planned for an area off the coast of Delaware and would have been visible from the southern end of Cape May County, the release added.

Gov. Phil Murphy and President Biden’s administrations were among the early supporters of New Jersey’s proposed offshore wind projects, maintaining that they would be a source of green energy to help counter the effects of global warming caused by fossil fuels.

After Orsted abruptly scrapped its New Jersey projects in October 2023, Murphy responded with an angry statement blasting the company for its “outrageous” decision and openly questioning its credibility and competence.

   Wind farm opponents symbolically linked hands on the Ocean City beach during a protest against Orsted in 2023.   

In the news release, Desiderio and Donohue both cited the county’s legal challenge as a major reason for Orsted’s withdrawal from the project.

“In the end, thanks to the efforts of the county of Cape May, its litigation partners, courageous elected officials, and dedicated grassroots activists, the threat that the Orsted projects posed to the people and businesses of Cape May County have been stopped,” Desiderio said.

Donohue noted that Orsted told its investors and the media that there were “a couple of local construction permits that turned out to be more challenging and a bigger risk for the project than assumed.”

“This is a clear admission that the actions of the county and its litigation partners, as well as the efforts of grassroots activists, posed too big a risk for Orsted as it struggled with negative economic forces,” Donohue said. “There is no doubt that Commissioner Desiderio’s leadership of the Board of Commissioners in opposing Orsted and offshore wind was the pivotal element to our success in stopping the economic and environmental devastation that these projects would have wrought.”

In its federal lawsuit against the Bureau of Ocean Energy Management and other federal agencies, Cape May County was joined by the Cape May County Chamber of Commerce, Clean Ocean Action, Garden State Seafood, the Greater Wildwood Hotel and Motel Association, Lamonica Foods LLC, Lunds Fisheries and Surfside Seafood Products LLC as plaintiffs.