(Reuters) – Atlantic Shores, a joint venture between Shell Plc and France’s EDF, reiterated its commitment to delivering New Jersey’s first offshore wind project on Thursday, despite Shell’s recent $1 billion write-off related to the venture.
Shell’s fourth-quarter earnings included $2.2 billion in impairments, part of which was a $1 billion write-off for Atlantic Shores, with Chief Financial Officer Sinead Gorman stating that the project did not align with the company’s capabilities or return goals. Shell is now looking to monetize its stake.
Atlantic Shores had submitted a proposal in July last year to supply offshore wind energy to New Jersey as part of the state’s Fourth Offshore Wind Solicitation.
In response to Shell’s write-off, Atlantic Shores affirmed its dedication to progressing with the project, emphasizing its compliance with obligations to local, state and federal partners under existing leases and permits, the company said in a statement.
“Business plans, projects, portfolio projections, and scopes evolve over time – and as expected for large, capital-intensive infrastructure projects like ours, our shareholders have always prepared long-term strategies that contemplate multiple scenarios that enable Atlantic Shores to reach its full potential,” the company stated.
The Atlantic Shores South wind project is expected to generate up to 2,800 megawatts of electricity, enough to power close to 1 million homes, according to the U.S. Interior Department.
However, the broader offshore wind sector has faced significant economic challenges, including soaring materials costs, high interest rates and supply-chain delays.
Several major developers, including Orsted, Equinor, BP, Avangrid and Shell, have canceled or sought to renegotiate power contracts for planned U.S. wind farms with expected start dates between 2025 and 2028.
Offshore wind remains a target, as new U.S. President Donald Trump is set to follow through on his pledge to halt such projects, creating ongoing uncertainty for the industry.
(Reporting by Sherin Elizabeth Varghese in Bengaluru; Editing by Matthew Lewis)
