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The $1 Billion Write-Off

In its January 30 Q4 2024 earnings announcement, Shell revealed its exit from the Atlantic Shores offshore wind project, resulting in a nearly $1 billion write-off and signaling a major shift in its renewable energy strategy. The project, located off the New Jersey coast between Atlantic City and Barnegat Light, was set to include nearly 200 wind turbines capable of powering over 700,000 homes.

Shell's Chief Financial Officer, Sinead Gorman, explained the decision in a call with reporters, stating that the project no longer aligns with Shell’s capabilities or expected returns. As a result, the company opted to write off the investment, resulting in a $996 million impairment. Shell recorded over $1 billion in impairment charges, primarily tied to renewable energy assets in North America. These charges were part of a larger $2.2 billion net impairment in Q4 2024. This strategic shift comes as Shell reported a 16% decline in 2024 profits, with earnings falling to $23.72 billion from $28.25 billion in 2023.

The Atlantic Shores project, formerly a joint venture with EDF Renewables, faces uncertainty following Shell's withdrawal. While project representatives insist they remain committed to New Jersey's first offshore wind initiative, Shell's exit marks another setback for the state's renewable energy goals. Shell’s withdrawal is part of a broader strategic shift in its renewable energy approach. In December 2024, the company announced it would no longer pursue new offshore wind projects. It has already divested from multiple wind initiatives, including:

• A 50% stake in the 2.4 GW SouthCoast Wind Energy Project in Massachusetts.

• A 1.5 GW development in South Korea - enough to power approximately 1 million homes.

According to Shell’s 2024 Energy Transition Strategy the energy giant plans to invest $10–15 billion in low-carbon energy solutions between 2023 and 2025, focusing on select markets and segments. The company is also shifting its strategy toward serving commercial customers rather than retail consumers.

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U.S. Offshore Wind Farms

Project Cancellations

Shell is not the only company scaling back offshore wind projects. Within two years of each other Ørsted canceled its Ocean Wind 1 and 2 projects in New Jersey, totaling 2,400 MW, while Avangrid paid $48 million in penalties for terminating its Commonwealth Wind project. Eversource also sold its entire offshore wind portfolio to Global Infrastructure Partners, signaling a broader trend of companies reevaluating their offshore wind investments. This wave of exits has had a major impact on the U.S. offshore wind industry, with canceled projects accounting for more than 12 gigawatts of power—over half of the project pipeline.

States like New York and Massachusetts, despite their ambitious renewable energy targets, faced setbacks as projects like the $11 billion Clean Path New York transmission line (4 GW capacity) were canceled due to cost overruns and a lack of state subsidies. Projects like Revolution Wind (704 MW) and Coastal Virginia Offshore Wind (1,265 MW) face prolonged federal reviews.

The future of the U.S. offshore wind sector depends on resolving regulatory uncertainty, stabilizing costs, and securing bipartisan support. While states like New Jersey and New York remain committed to renewable energy goals, federal policy reversals and corporate pullbacks signal a prolonged slowdown. Shell’s retreat underscores the delicate balance between energy transition ambitions and financial realities in an unpredictable political landscape.

Atlantic Shores

New Jersey’s offshore wind farm was set to be the state’s first and largest, expected to power over one million homes and support its 2040 offshore wind target. Shell’s exit leaves a 40% shortfall in that goal. It seems the company is pivoting back despite full federal permitting - as of July 2024. The Atlantic Shores divestment follows others from the company in Massachusetts, South Korea and Scotland. The project did not come without headwinds from the current administration and New Jersey Republicans:

• Trump Administration Policies: In January 2025, President Trump issued an executive order halting new offshore wind leases and permitting, creating regulatory uncertainty. Shell’s withdrawal came just days after Trump declared Atlantic Shores “dead and gone,” signaling increased hostility toward the sector.

• Local Opposition: The project also faced lawsuits and resistance from New Jersey Republicans, including Rep. Jeff Van Drew, who opposed its proximity to shore (8.7 miles) and potential environmental impacts.

An Atlantic Shores spokesperson told Patch Media the company remains "committed to New Jersey and delivering the Garden State’s first offshore wind project." With the project likely to continue, Shell’s exit will create a financing gap that potential investors could fill. Ocean Winds is a strong candidate, having recently acquired Shell's stake in the SouthCoast Wind project. As a joint venture between EDP Renewables and ENGIE, the company has shown a clear commitment to expanding its U.S. offshore wind presence. Invenergy and energyRe may also be interested, given their recent approval for the 2.4GW Leading Light Wind project in New Jersey. Their existing presence in the state's offshore wind sector makes them logical contenders.

Shell’s Pivot

High-Return Renewables

Despite scaling back on offshore wind, Shell remains committed to high-value renewable energy projects across solar power, green hydrogen, biofuels, and electric mobility. In solar energy, Shell strengthened its position with the 2022 acquisitions of Silicon Ranch, a U.S. subsidiary operating 1.1 GW across 140+ projects in 14 states, and Sprng Energy, which added 2.9 GW of solar capacity in India. In green hydrogen, Shell is advancing large-scale projects in Europe, including the Holland Hydrogen I (Netherlands), a 200 MW electrolyzer set to produce 60,000 kg/day by 2025, and REFHYNE II (Germany), a 100 MW electrolyzer targeting 44,000 kg/day by 2027. However, Shell has reprioritized its green hydrogen investments, scrapping a 2025 pilot project at Brazil’s Port of Açu in favor of European opportunities.

Biofuels remain a key pillar of Shell’s low-carbon strategy. The 2023 acquisition of Nature Energy, a Danish biogas producer, added 6.5 million MMBtu/year of renewable natural gas to its portfolio. Meanwhile, the Raízen joint venture in Brazil continues to produce 3.75 billion liters of ethanol annually from sugarcane. Shell has also expanded its presence in electric mobility, growing its global EV charging network to over 30,000 public charge points, with strategic placements at Shell retail sites.

As part of its strategic pivot, Shell has committed $10–15 billion to low-carbon energy investments from 2023 to 2025, with 23% of its 2023 capital spending ($5.6 billion) directed toward renewables. The company is also rationalizing its portfolio, exiting residential energy markets in Europe and reducing its offshore wind exposure to prioritize hydrogen, biofuels, and select power markets. Regionally, Shell leads in European hydrogen, operates wind farms, and maintains strong solar and LNG-renewable hybrid projects in the Asia-Pacific. In the Americas, while retaining solar and onshore wind assets, Shell has withdrawn from major offshore wind developments.

U.S. Political Landscape

Shells pivot is not only strategic but also in response to a change in sentiment from the new administration as previously mentioned. Bloomberg reported that last week, Trump targeted the Atlantic Shores development in a post on Truth Social, expressing hope that the wind farm off southern New Jersey would be “dead and gone.” The former president collaborated with New Jersey Congressman Jeff Van Drew, a vocal critic of the project, to draft executive orders aimed at the offshore wind industry on his first day in office.

On January 20, 2025, the Trump administration took significant action against wind energy development through a series of executive orders that imposed major barriers for the industry. These orders temporarily halted all offshore wind lease sales in federal waters, paused permitting, approvals, and loans for both onshore and offshore projects, and directed a comprehensive review of environmental impacts, economic costs, and the viability of subsidies for the sector.

As a result, a two-tier system emerged, where projects with existing federal permits, such as Vineyard Wind 1, continued, but those in the permitting phase, like SouthCoast Wind and Attentive Energy Two, faced delays. This disruption has created uncertainty for billions in capital investment, affecting 73 gigawatts of offshore wind capacity and threatening over 130,000 jobs across the industry. The executive orders are set to remain in effect until revoked, with significant implications for offshore wind projects in states like New Jersey, New York, and Massachusetts.

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