The world’s largest offshore wind developer, Orsted, halted development Wednesday on two U.S. offshore wind projects, citing higher costs and supply chain delays.

The Danish-based company said Wednesday that impairments had surged to $5.6 billion as it was forced to halt the construction of two New Jersey offshore wind farms, Ocean 1 and Ocean 2. The projects were expected to create a combined 2,248 MW in offshore energy generation.

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“The world has in many ways, from a macroeconomic and industry point of view, turned upside down,” Orsted CEO Mads Nipper told reporters on a call Wednesday.

The news prompted Orsted stocks to fall by 22% to a six-year low for the company.

News of Orsted’s exit in New Jersey is a significant blow to the broader offshore wind industry in the United States.

And it threatens the Biden administration’s ambitious target of developing 30 GW worth of offshore wind development by 2030

The U.S. offshore wind industry has faced a cascading series of setbacks as new commercial-scale projects look to come online, including poorly negotiated power purchase agreements, an underdeveloped offshore supply chain, and high project costs that have ballooned amid rising global demand and unanticipated global crises.

Already, many had seen the 30 GW offshore wind target as all but impossible to reach.

The 30 GW offshore target "is now, unfortunately, not something that the developers are really aspiring to," Michael Brown, the North America manager for Ocean Winds, said at an industry event in July.

Others have widely echoed this assessment.

“We’re definitely not on the track that we’d hope or we’d think we'd be right now,” Kris Ohleth, executive director of the Special Initiative on Offshore Wind, told the Washington Examiner. 

The Biden administration has overseen billions of dollars in federal funding for offshore wind, primarily via the Inflation Reduction Act, which allocated $369 billion for clean and renewable energy growth.

Still, major developers, including Orsted, have argued that they do not have access to nearly enough cash for the massive build-out.

Just last month, in fact, Nipper warned in an interview with Bloomberg that Orsted is at risk of shuttering its U.S. offshore projects completely if it did not receive more federal support, including Inflation Reduction Act subsidies.

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At the time, impairments stood at a much smaller $2.3 billion.

“We are still upholding a real option to walk away,” Nipper told the outlet.