The first turbines installed at Ørsted’s Block Island Wind Farm off the coast of New Shoreham, Rhode Island, on Sept. 22, 2016. Scott Eisen / Getty Images

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Multinational energy company Ørsted has stopped development on two offshore wind projects in the U.S., saying impairments related to the projects could be as high as $5.58 billion, reported Reuters.

The 2,248-megawatt projects, Ocean Wind 1 and 2, are located in New Jersey.

Stock for Danish firm Ørsted, the largest offshore wind developer in the world, fell as much as 22 percent to $37.71, its lowest value in six years.

Ørsted explained the decision by citing rising interest rates, high inflation and supply chain issues, The Guardian reported.

“The world has in many ways, from a macroeconomic and industry point of view, turned upside down,” CEO of Ørsted Mads Nipper said yesterday, as reported by The New York Times.

Nipper said a “perfect storm” of problems was affecting the offshore wind industry worldwide.

“This industry does not need to be in a crisis,” Nipper said, as The Guardian reported. “We are of the opinion that it all hinges on being realistic about [what] power prices need to be.”

The cancellation will likely affect President Joe Biden’s goal of 30 gigawatts of U.S. offshore wind capacity by 2030.

Earlier this week, oil giant BP recorded an $540 million impairment on wind projects, and last week its partner company on offshore wind developments in New York, Norwegian company Equinor, booked an impairment of $300 million, reported Reuters.

Despite the setbacks, the White House said it was still dedicated to offshore wind in the U.S., citing the billions in incentives provided in the Inflation Reduction Act.

“While macroeconomic headwinds are creating challenges for some projects, momentum remains on the side of an expanding U.S. offshore wind industry,” said White House spokesperson Michael Kikukawa, as Reuters reported.

Nipper said the company should not have invested so much in the early stages of Ocean Wind 1.

“I want to be absolutely clear that we are taking away all learnings from this into future project development and timing for capital commitments,” Nipper said, as reported by Reuters.

Nipper said there needed to be a “reset” of the cost of offshore power.

Jeff Tittel, environmental advocate and former director of the New Jersey chapter of Sierra Club, said Ørsted’s cancellation was bad news for clean energy in the state, The New York Times reported.

“There’s really not a Plan B right now,” Tittel said, as reported by The New York Times. “It’s a political disaster.”

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