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Atlantic Shores Reaffirms Commitment to New Jersey Offshore Wind Despite Shell's Write-off

Atlantic Shores is a joint venture between Shell Plc, France's EDF and the State of New Jersey. It reiterated on Thursday its commitment to deliver New Jersey's 1st offshore wind project, despite Shell’s recent $1 billion write off related to this venture.

Shell's fourth quarter earnings included $2.2 Billion in impairments. Part of this was a $1 Billion write-off on Atlantic Shores. Chief Financial Officer Sinead GORMAN stated that the project didn't align with the company’s capabilities or goals. Shell now wants to monetize the stake.

Atlantic Shores submitted a proposal to New Jersey in July of last year as part the Fourth Offshore Wind Solicitation.

Atlantic Shores, in response to Shell's write off, affirmed its commitment to moving forward with the project. The company stressed its compliance with existing leases and permit obligations with local, state, and federal partners, according to a statement.

The company said that "business plans, portfolio projections and scopes change over time. As is expected with large capital-intensive projects such as ours, shareholders have always developed long-term strategies which consider multiple scenarios to enable Atlantic Shores reach its full potential."

According to the U.S. Interior Department, Atlantic Shores South is expected to generate electricity up to 2,800 Megawatts, which would be enough to power about 1 million homes. Interior Department.

The offshore wind industry has been faced with significant economic challenges. These include soaring material costs, high interest rate and supply-chain delays.

Several major developers including Orsted Equinor BP Avangrid Shell have canceled power contracts or attempted to renegotiate them for planned U.S. Wind Farms with start dates expected between 2025-2028.

Offshore wind is still a target as the new U.S. president Donald Trump will follow through with his promise to stop such projects. This creates ongoing uncertainty for this industry. Reporting by Sherin Varghese, Bengaluru. Editing by Matthew Lewis

(source: Reuters)