The cancellation of one of the largest offshore wind projects in U.S. history is dealing another blow to a fledgling industry that’s key to the Biden administration’s climate goals.

Danish wind developer Ørsted announced late Tuesday that it is no longer moving forward with Ocean Wind, a pair of projects off the New Jersey coast that would have provided power to about 1 million people.

CEO David Hardy cited high inflation, rising interest rates and supply chain bottlenecks as leaving the company “no choice but to cease development.“

“We are extremely disappointed to have to take this decision, particularly because New Jersey is poised to be a U.S. and global hub for offshore wind energy,” Hardy said in a news release.

The bigger picture
The cost concerns are not unique to Ørsted, writes Ben Storrow. Other offshore wind developers along the East Coast have canceled or tried to renegotiate their power contracts with states in recent months, putting a spotlight on the industry’s economic headwinds.

Such challenges could jeopardize President Joe Biden’s goal to build 30,000 megawatts of offshore wind by 2030. The White House and congressional Democrats have tried to ease the way for the industry through the landmark Inflation Reduction Act, which poured billions of dollars into boosting clean energy projects.

But those funds, and how they are allocated to developers, may not be matching up with the support that offshore wind companies say they need to ensure their investments make economic sense, Ben writes.

For example, Ørsted has said it might not qualify for some of the law’s tax credits under the IRS’s proposed rules.

‘Undeniable momentum’?
The White House has expressed confidence the industry will overcome such struggles. Hours before Ørsted’s announcement, the Interior Department approved its fifth — and largest — offshore wind project, writes Heather Richards.

Slated for off the coast of Virginia Beach, the Dominion Energy project would provide power to about 660,000 homes and expand offshore wind development southward along the Atlantic coast.

On Tuesday, Interior Secretary Deb Haaland pointed to the Coastal Virginia Offshore Wind project as proof of the “undeniable momentum” of the administration and the U.S. offshore wind industry.

“We are aggressively working toward our clean energy goals,” Haaland said.

It’s Wednesday — thank you for tuning in to POLITICO’s Power Switch. I’m your host, Niina H. Farah. Power Switch is brought to you by the journalists behind E&E News and POLITICO Energy. Send your tips, comments, questions to [email protected].

Today in POLITICO Energy’s podcast: James Bikales breaks down what the United Auto Workers union won in its tentative contract agreements with the Big Three automakers.

NASA wants to mine the moon
Mining the moon could be another chapter in the U.S. competition with China for access to minerals. NASA and the U.S. Geological Survey are cataloguing lunar resources with the idea they’ll eventually be extracted, Hannah Northey reports.

The U.S. and more than 20 other countries in 2020 joined the Artemis Accords, signing off on principles that will govern mining. China, Russia and other countries are pursuing a competing project called the International Lunar Research Station.

GOP spotlight lands on Interior
A White House decision to elevate Laura Daniel-Davis to the No. 2 position at the Interior Department upset Senate Republicans and a key Democrat, Sen. Joe Manchin of West Virginia, Nidhi Prakash and Emma Dumain report.

Daniel-Davis has been criticized for past support of efforts to curtal oil and gas leases in Alaska in line with the Biden administration’s climate goals. She had failed to win Senate confirmation for a separate post because of her views on climate change.

The king’s (climate) speech
King Charles III will attend COP 28 in Dubai next month, his first climate summit since ascending to the throne, Charlie Cooper reports.

The now-king played a major role in COP 26 in 2021 when the U.K. hosted and he was still prince of Wales. He did not attend last year after some confusion.

Charles is slated to speak Dec. 1 at the summit, according to Buckingham Palace.

Power player: Money is flowing into Guyana as Exxon Mobil capitalizes on huge oil discoveries it made there starting in 2015. The company has spent nearly $1 billion on the local economy and outreach as it aims to put its stamp on the nation.

“We feel our name and our brand is now tied to whether this turns out to be a success for the people of the country,” said Exxon’s country manager, Alistair Routledge.

Elephant in the room? A draft international declaration on the health impacts of climate change leaves out the leading cause of global warming: fossil fuels.

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A carbon-removal company will inject carbon dioxide into concrete in a bid to sidestep permitting issues.

Oil companies are thriving ahead of the COP 28 climate summit.

New England’s power grid operator plans to spend $1.5 billion on its transmission system to accommodate a new influx of wind, solar and battery storage projects.

That’s it for today, folks! Thanks for reading.