The decision by Ørsted to deep-six its two wind farm projects off the South Jersey coast creates double trouble — economic and environmental.

Key players already knew the industry faced headwinds like spiraling steel costs, supply-chain issues, and high interest rates as other states had already renegotiated imperiled wind farm contracts.

“I think there was an expectation for a pause, a delay, a restructuring or a re-evaluation,” says Doug O’Malley, director of Environment New Jersey. “That being said, this was not the only project that was planned off the Jersey Shore.”

But it would have been the first offshore wind project to fire up in New Jersey — by 2026 and with enough juice to power 1 million homes. By pulling the plug, Ørsted took a $5.6 billion loss.

Industry analyst Kris Ohleth insists offshore wind still has a strong future in New Jersey. Atlantic Shores remains committed to its project located ten to 20 miles off the coast. And the New Jersey Board of Public Utilities just received four more bids for additional projects. “New Jersey is already moving swiftly forward with their solicitations for projects are in consideration right now and we would expect a decision on that early next year,” Ohleth said.

But Brian Lipman, the director of the Division of Rate Counsel, warns, “I can’t imagine we don’t see higher prices in the short term.” He had already raised red flags about how much offshore wind will cost ratepayers.

To fight climate change, President Biden has set a target of “30 by 30” — 30 gigawatts of offshore wind energy by 2030. Projects dot the East Coast; the largest, off Virginia, just got federal approval. And New Jersey has serious skin in the wind turbine game, with a new wind port and monopile construction facility in South Jersey. Unfortunately, Ørsted’s decision just iced a couple of hundred union jobs there, at least for now — angering lawmakers.

“It’s a clear setback for New Jersey’s clean-energy goals, and a setback more broadly for the industry. You know, that doesn’t mean that we can’t meet our goals,” O’Malley said.

Ørsted could sell its two offshore leases and all of the prep work. But it won’t collect the $1 billion worth of tax incentives that Gov. Phil Murphy approved. The state also intends to wrangle back another $300 million in outstanding escrows and performance fees.