Tag: Ørsted

How Global Offshore Wind Is Battling a Perfect Storm of Challenges

Over the past couple of years, the global offshore wind sector has been facing growing pains, with supply chain constraints, policy volatility, and economic headwinds threatening a power segment that has been slated to become the most dominant wind energy source in many regions. These challenges are increasingly forcing companies in the space to abandon projects and undergo strategic restructuring as the momentum for offshore wind and other nascent clean energy industries, such as hydrogen, wanes.

A series of offshore wind turbines standing on platforms in a stormy sea, with gray sky and rough waves.

From OilPrice.com

By Alex Kimani

Offshore wind turbines on floating platforms in a serene ocean setting, with birds flying in a clear blue sky.
  • The global offshore wind industry is struggling with rising costs, policy instability, and supply chain disruptions.
  • Shell and Equinor have pulled out of key offshore wind and hydrogen ventures, including projects in Vietnam and Norway.
  • U.S. offshore wind faces deeper trouble after the Trump administration canceled nearly $700 million in project funding.

Over the past couple of years, the global offshore wind sector has been facing growing pains, with supply chain constraints, policy volatility, and economic headwinds threatening a power segment that has been slated to become the most dominant wind energy source in many regions. These challenges are increasingly forcing companies in the space to abandon projects and undergo strategic restructuring as the momentum for offshore wind and other nascent clean energy industries, such as hydrogen, wanes. To wit, last year, Shell Plc (NYSE: SHEL) announced plans to cease new offshore wind investments and split its power division as CEO Wael Sawan looks to boost the company’s profitability. Shell appears to be systematically scaling back its clean energy investments: Earlier in the year, the company also ditched plans to build a low-carbon hydrogen plant on Norway’s west coast due to a lack of demand.

Earlier in the same year, Norway’s state-controlled energy giant Equinor ASA (NYSE: EQNR) abandoned plans to invest in Vietnam’s offshore wind sector, dealing a significant blow to the country’s green energy ambitions. According to the World Bank, over the past couple of years, Vietnam has attracted plenty of interest in its clean energy sector thanks to the country’s strong winds in shallow waters near coastal, densely populated areas. Unfortunately, recent political turbulence in the country has paralyzed regulatory reforms and discouraged investors. That marked the first time Equinor had abandoned offshore wind development; in contrast, the company had previously exited more than a dozen fossil fuel projects to focus on renewables and low-carbon systems. Back in 2023, Danish offshore wind giant Ørsted A/S (OTCPK: DNNGY) paused its multi-gigawatt offshore wind plans in Vietnam, citing issues with the “route to market,” business ethics, and a lack of a comprehensive legal framework for the sector.

Related: North Sea Oil: Booming in Norway and Doomed in the UK

Unfortunately, the offshore wind sector woes appear to be going nowhere. Back in July, Ørsted paid $110 million to Danish offshore wind services provider Cadeler (NYSE:CDLR) as compensation for the cancellation of the construction of a wind turbine installation vessel (WTIV) for the 2.4 GW Hornsea 4 offshore wind farm in the UK. In May, Ørsted announced the cancellation of the project, citing higher rates, rising supply chain costs and increased construction risks as some of the challenges. Ørsted was among the developers who were awarded contracts in the UK’s Allocation Round 6 (AR6) in 2024 that procured 9.6 GW of clean energy capacity from offshore and onshore wind and solar energy. AR6 marked a major improvement from AR5, which failed to secure any new offshore wind projects.

On a brighter note, Cadeler’s short-term financials will receive a boost from the receipt of the termination compensation, with the company recently upgrading its full-year 2025 revenue to the range of EUR 588 million to EUR 628 million, up from EUR 485 million to EUR 525 million, while the EBITDA forecast for 2025 is expected to clock in at EUR 381–421 million, up from EUR 278–318 million.

Meanwhile, Singapore’s Seatrium Ltd (OTCPK: SMBMF) recently received a notice of the termination of a WTIV contract by Maersk Offshore Wind valued at $475 million. Seatrium had secured the contract in 2022 while still operating as Sembcorp Marine, before it merged with Keppel Offshore and Marine in 2023 in a $3.34 billion deal. Maersk says it will try and recover monies already paid to Seatrium, adding that it will not accept delivery of the unit due to delays in the construction schedule despite the project being ~ 98.9%. Seatrium shares have tanked nearly 15% after the announcement of the Maersk decision.

Maersk’s cancellation of the Seatrium deal could signal that it’s abandoning the offshore wind business, which says something considering the startling fall of its core container shipping business. Earlier this month, Reuters reported that container shipping rates for the busy Shanghai to Los Angeles route have declined by nearly 60%, meaning the company is likely receiving below $2,200 per container it requires to break even.

That said, the U.S. offshore wind sector could fare worse than its European peers thanks to policy headwinds by the Trump administration. Trump has cancelled ~$679 million in U.S. offshore wind project funding, stifling growth and development of the nascent sector. In contrast, WindEurope recently reported it built 6.8 GW of wind power across Europe in the first half of 2025, comprising 6 GW onshore and 0.7 GW offshore. Europe is, by far, the biggest offshore wind market in the world, commanding 92% of the floating offshore wind market. However, Asia-Pacific is enjoying the fastest growth, with the region projected to expand at a torrid 156% CAGR through 2030.

Alex Kimani is a veteran finance writer, investor, engineer and researcher for Safehaven.com. 

By Alex Kimani for Oilprice.com

A large offshore wind turbine lies partially submerged on a beach, with water splashing around its base and a dramatic sky in the background.

Revolution Wind Is barking up the wrong tree

There has been a flurry of activity surrounding the Revolution Wind project off of Rhode Island over the past month.

A silhouette of a person standing in front of a row of wind turbines against a sunset sky.

From CFACT

By Collister Johnson

There has been a flurry of activity surrounding the Revolution Wind project off of Rhode Island over the past month.

On August 22, 2025, the Bureau of Ocean Energy Management (BOEM) issued a stop work order to Ørsted, the project developer, citing “concerns over permitting and national security issues.” Ørsted responded shortly thereafter with two lawsuits: one filed against BOEM in the U.S. District Court for Rhode Island and another in the U.S. District Court for the District of Columbia.

Both lawsuits requested a preliminary injunction against BOEM and relied on alleged violations of the Administrative Procedure Act (APA). The APA prohibits federal agencies from issuing regulations that are “arbitrary, capricious, or otherwise not in accordance with law.”

On September 22, 2025, the D.C. District Court issued an opinion, agreeing with Ørsted, that the government’s actions were “arbitrary and capricious” under the APA and granted Ørsted a preliminary injunction, staying the stop work order.

BOEM will likely appeal this decision to the U.S. Court of Appeals for the District of Columbia, raising interesting questions: What if this case should never have been heard by the U.S. District Court in the first place? What if that court lacked jurisdiction over the subject matter? And what if the court that will hear the appeal—the D.C. Court of Appeals—recently ruled in a similar case that U.S. District Courts do not have jurisdiction over situations like the stop work order, but rather the U.S. Court of Claims has exclusive jurisdiction over cases against the U.S. government that are “essentially contractual in nature”?

On September 2, 2025, the D.C. Court of Appeals did just that in a case involving the controversial “gold bars” grants, which the Biden administration awarded to various newly formed NGOs in the final weeks before the Trump administration took office. These $20 billion in “gold bars” were held by Citibank as an agent for the federal government. EPA Administrator Lee Zeldin refused to allow Citibank to release the funds. The NGOs sued in the D.C. District Court, which ruled that the EPA’s action was arbitrary and capricious under the APA and issued a temporary injunction against the government.

The EPA appealed to the D.C. Court of Appeals, and on September 2, 2025, in United Climate Fund v. Citibank, the court reversed the lower court, holding that the D.C. District Court lacked jurisdiction to decide the case because the grants were “essentially contractual in nature”—a contractual money dispute—and therefore subject to the exclusive jurisdiction of the U.S. Court of Claims.

The parallels to Revolution Wind are clear. The construction of the project is governed by a document called a Construction and Operations Plan (COP). The COP is a contract between the federal government and a vendor, in this case, Ørsted. It is a standard government contract with, in the words of the Court of Appeals, “offer, acceptance, and consideration”—all hallmarks of a contractual transaction. Ørsted’s claim against the government is essentially for breach of contract, and the relief Ørsted seeks—specific performance of the contract and monetary damages—is precisely the type of claim the Court of Claims is uniquely equipped to adjudicate.

Most importantly, the Court of Claims is not authorized to issue injunctive relief, only to assess monetary damages. The D.C. Court of Appeals made it clear that government contractors, like Ørsted, may attempt to frame their claims as falling under the APA to obtain injunctive relief, but their claims are, at their core, routine contract disputes that can only be adjudicated by the Court of Claims.

Moreover, the COP grants the government the authority to make unilateral changes to the contract. The Ørsted COP (and the COPs of all other offshore wind projects) states that “the Department of the Interior reserves the right to amend these conditions [of the contract] or impose additional conditions authorized by law or regulation on any future approvals of COP revisions.” Far from breaching the contract, the stop work order is precisely the kind of “revision” Ørsted agreed the government could impose, as specified in the contract’s language.

The bottom line is this: Ørsted may have a cause of action, but it brought the case to the wrong court. The APA does not apply to its case. Ørsted is not entitled to injunctive relief, and the Trump administration did not breach the contract because the stop work order falls within the range of actions explicitly authorized by the contract’s language.

Given its recent decision in the “gold bars” case, the D.C. Court of Appeals should have no difficulty reaching the same conclusion for Revolution Wind.

This article originally appeared at Real Clear Energy

Orsted Pull The Plug On AR7

As we know, Orsted, Denmark’s world leading offshore wind developer, pulled out of its Contract for Difference to build a giant 2400 MW Hornsea 4 wind farm in May. The contract had only been signed last year, with a guaranteed, index linked price on the table of £84.97/MWh. But they could make no money out of that.

A desolate landscape featuring rusted wind turbine structures partially submerged in water, under a dramatic dark sky.

From NOT A LOT OF PEOPLE KNOW THAT

By Paul Homewood

This may be a fatal blow to Crazy Ed Miliband’s North Sea Wind Fantasy:

Headline of an article discussing the crisis facing Britain's largest wind farm operator after a key deal was canceled.

As we know, Orsted, Denmark’s world leading offshore wind developer, pulled out of its Contract for Difference to build a giant 2400 MW Hornsea 4 wind farm in May. The contract had only been signed last year, with a guaranteed, index linked price on the table of £84.97/MWh. But they could make no money out of that.

Crazy Ed was no doubt hoping that they could be tempted back this summer to take advantage of the obscenely higher prices he was offering to fulfil his dream. The new prices of £116/MWh he offered were 36% higher than before. But even that was not enough to tempt the Danish Government backed Orsted. According to the Telegraph:

Ørsted also confirmed that the company would not be offering to build any more UK wind farms in AR7, a blow to Mr Miliband’s ambition to decarbonise the grid by 2030.

The company insisted this was not a result of developments in the US but reflected the fact that “we do not have any projects that are eligible to be considered”.

https://www.telegraph.co.uk/business/2025/08/25/major-british-windfarm-operator-crisis-after-trump-deal

Orsted have already been forced to issue a £7billion rights issue, needed to fund existing projects which are no longer viable.

As the Telegraph report, Orsted’s days of milking billions out of US taxpayers to build their whale killing monstrosities off the coast of New York and New England are over, with Trump insisting on value for money and proper environmental protection.

Orsted don’t even have enough money to finish off the projects in hand. And their business model of developing new sites and then selling on as cash cows to other investors is no longer viable, with costs increasing and subsidies falling.

Orsted, with backing from the Danish state, has long dominated UK offshore wind. At last year’s AR6, the only other successful applicant was East Anglia Two, ultimately owned by the Spanish conglomerate, Iberdrola, who only contracted for 900 MW.

Have any energy businesses or investors now got the sort of money to build the multi billion wind farms in the North Sea that Miliband wants at prices that are remotely viable?

If nothing else, Orsted’s exit will raise the bar as far as price is concerned. If Crazy Ed is to get the capacity he is so desperate for, he will have to pay through the nose for it.

Or rather, we will!

As we know, Orsted, Denmark’s world leading offshore wind developer, pulled out of its Contract for Difference to build a giant 2400 MW Hornsea 4 wind farm in May. The contract had only been signed last year, with a guaranteed, index linked price on the table of £84.97/MWh. But they could make no money out of that.

Crazy Ed was no doubt hoping that they could be tempted back this summer to take advantage of the obscenely higher prices he was offering to fulfil his dream. The new prices of £116/MWh he offered were 36% higher than before. But even that was not enough to tempt the Danish Government backed Orsted. According to the Telegraph:

Ørsted also confirmed that the company would not be offering to build any more UK wind farms in AR7, a blow to Mr Miliband’s ambition to decarbonise the grid by 2030.

The company insisted this was not a result of developments in the US but reflected the fact that “we do not have any projects that are eligible to be considered”.

https://www.telegraph.co.uk/business/2025/08/25/major-british-windfarm-operator-crisis-after-trump-deal

Orsted have already been forced to issue a £7billion rights issue, needed to fund existing projects which are no longer viable.

As the Telegraph report, Orsted’s days of milking billions out of US taxpayers to build their whale killing monstrosities off the coast of New York and New England are over, with Trump insisting on value for money and proper environmental protection.

Orsted don’t even have enough money to finish off the projects in hand. And their business model of developing new sites and then selling on as cash cows to other investors is no longer viable, with costs increasing and subsidies falling.

Orsted, with backing from the Danish state, has long dominated UK offshore wind. At last year’s AR6, the only other successful applicant was East Anglia Two, ultimately owned by the Spanish conglomerate, Iberdrola, who only contracted for 900 MW.

Have any energy businesses or investors now got the sort of money to build the multi billion wind farms in the North Sea that Miliband wants at prices that are remotely viable?

If nothing else, Orsted’s exit will raise the bar as far as price is concerned. If Crazy Ed is to get the capacity he is so desperate for, he will have to pay through the nose for it.

Or rather, we will!

U.S. Offshore Wind: Politics Giveth, Taketh

Last Friday, the Daily Caller News Foundation broke an exclusive story that the U.S. had ordered a halt to construction on the offshore Revolution Wind Farm project. The article, “Trump Admin Kills Massive Offshore Wind Project,” announced the Bureau of Ocean Energy Management (Department of Interior).

A moody seascape featuring wind turbines in the ocean under a cloudy sky, with gentle waves and a faint silhouette of a city skyline in the background.

From Master Resource

By Allen Brooks

Ed. Note: The government-enabled on-grid wind and solar industries are on the downside of a political business cycle. The lesson for sustainable entrepreneurship is to meet underlying consumer demand, not rely on special favor from temporary political majorities.

Last Friday, the Daily Caller News Foundation broke an exclusive story that the U.S. had ordered a halt to construction on the offshore Revolution Wind Farm project. The article, “Trump Admin Kills Massive Offshore Wind Project,” announced the Bureau of Ocean Energy Management (Department of Interior).

Revolution Wind is a 704-megawatt (MW), 65-turbine wind project located 15 miles south of Rhode Island’s Point Judith port and 32 miles southwest of Martha’s Vineyard. The capacity has been contracted under 20-year power-purchase agreements to utilities in Massachusetts (304 MW) and Rhode Island (400 MW).

A second project (Revolution Wind 2) was rejected by Rhode Island Energy (PPL Corporation) and Rhode Island’s Public Utilities Commission and U.S. Department of Energy staff as too expensive.

The project is located on the federal lease area (OCS-A 0486), which developer Ørsted acquired when it purchased Deepwater Wind LLC, the developer of the Block Island Wind farm and holder of various offshore wind leases, in late 2018 for $510 million.

The locations of significant offshore wind projects.

Map showing the locations of significant offshore wind projects including Revolution Wind, Block Island Wind Farm, South Fork Wind Farm, and Vineyard Wind in Rhode Island Sound and Nantucket Sound.

Construction began on Revolution Wind in 2023, with the installation of the first offshore wind turbine in September 2024. Completion and operation of the project is scheduled in early 2026. Ørsted reported Friday night that the project was 80 percent complete with 45 of 65 wind turbines installed. The project was hailed as the first multi-state offshore wind project in the United States.

The DOI Director’s Order was issued by Matthew Giacona, Acting Director. Compare and contrast his letter with the one issued by Walter Cruickshank on April 16, 2025, ordering stoppage of Empire Wind.

DOI Letters: Empire State vs. Revolution Wind

In the Empire Wind stop-work order, the DOI cited as its reason to freeze work 

to allow time for it to address feedback it has received, including from the National Oceanic and Atmospheric Administration (NOAA), about the environmental analyses for that project. BOEM received this and other feedback regarding Empire Wind as an outgrowth of the review that the Department is engaged in related to offshore wind projects.

In contrast, the Revolution Wind order stated: 

… BOEM is seeking to address concerns related to the protection of national security interests of the United States and prevention of interference with reasonable uses of the exclusive economic zone, the high seas, and the territorial seas, as described in that subsection of OCSLA.

There are two relevant facts and one supposition.

Fact 1: The fact we know about the Empire Wind stop-work order is that, in response to a freedom of information request, the DOI released a 36-page study related to its stop-work decision. The report was titled “Screening Analysis: A Summary of the Record for the Empire Wind Project-NMFS Fisheries Resources.” Twenty-seven of the pages were entirely redacted, a privilege due to the deliberative nature of the report and its role in the review process underway at the time. The public has learned that government agencies are entitled to protect internal studies from public release until final reviews are completed.

Fact 2: With respect to the DOI stop-work order for Revolution Wind, the issue is compliance with Outer Continental Shelf Lands Act (OCSLA) provisions. Consulting firm PLANET A* STRATEGIES℠ studied the compliance of the Bureau of Ocean Energy Management (BOEM) with the provisions of the laws governing the use of our nation’s oceans. The report was titled, “Cancelling Offshore Wind Leases” with a subheading of “Outer Continental Shelf Lands Act Non-Compliance in Offshore Wind Plant Leasing and Permitting Programs.” Their report was completed in early May, and the findings were presented to the DOI.

Supposition: The supposition relates to the reported agreement between the Trump administration and New York Governor Kathy Hochul for her support in the issuance of previously blocked permits allowing the construction of two natural gas pipelines into the state. That would boost supply to both New York and New England, both of which are short of natural gas supply for generating electricity during the winter months when the gas is diverted to home heating. That shortage causes winter electricity prices in the region to be much higher than during the summer months.

Sunrise Wind Next?

At the time of the Empire Wind stop-work order in April, I predicted the summer would be an interesting period for offshore wind legal activity. So far, so true. Adding to the legal activity, a petition was recently sent to Interior Secretary Doug Burgum requesting a re-examination of the approval of Sunrise Wind, a 924 MW, 84-turbine project. It is located about 19 miles south of Martha’s Vineyard, 30 miles east of Montauk Point, Long Island, and 17 miles from Rhode Island’s Block Island. This is another Ørsted project.

The approval process for Sunrise Wind is being challenged by the former members of the Rhode Island Fishermen’s Advisory Board (FAB), established under legislation regulating the state’s Department of Environmental Management’s review and approval of offshore wind projects that impact the state’s waters.

The complaint demonstrates

… misapplication of section 8(p)(4) of OCSLA and misapplication of NEPA (National Environmental Protection Act), attest to the illegal impacts to the fishing industry that were ignored in permitting the project, attest to the environmental impacts that were ignored in permitting the project, and request that all approvals of the project be rescinded.

Looking Ahead

There is much to come with the above projects given the plight of Ørsted, which is trying to raise $9.4 billion of additional capital to support its ongoing developments.

Once again, parties involved in the offshore-wind approval process are speaking out about violations of the legal approval process, which have and will continue to harm other legitimate users of the ocean shared with the wind project. The approval process ensures that all parties’ concerns are addressed and mitigated as best as possible. In the case of Sunrise Wind, according to the plaintiffs, this standard was ignored. As we enter the last days of summer, the legal battles over offshore wind are heating up.

Offshore wind fantasy is crumbling against hard reality of metal, boat, cable, and money shortage

It’s so unfair, the wind is free, but who could have known we’d need metals, boats, cables, and magnets?

From JoNova

By Jo Nova

It’s so unfair, the wind is free, but who could have known we’d need metals, boats, cables, and magnets?

Governments waved their magic wands to declare the renewable transition would “bling” into existence, but they didn’t bother doing the sums on whether we could mine the vast resources in time, and what would happen to the prices of everything, if every other stupid fashion-obsessed western nation tried to do the  same thing at the same time.

At the academic safe space known as “The Conversion” Thomas York explains to baffled renewables fans why wind farm developers are mysteriously pulling out at the last minute. He doesn’t spell out the baby-nature of the economic reality, but we can read between the lines. The ship called The Infrastructure-Bill has arrived and it’s killing them: the price of steel, copper and aluminium has doubled and tripled; we can’t make the right boats fast enough to build the towers out at sea; everyone wants high-voltage cabling at the same time, and they all need the rare metals for the magnets, which are well, rare. Then, the delays in arranging all this mean the developers fall over their contract agreements timelines, so they start to lose subsidies.

Ultimately developers have raised their prices to cover the true costs, but then the customers aren’t happy. As the University of Leicester researcher says so poignantly when faced with the brutal reality of the market: “it [wind power] is simply not profitable enough”. He even admits “renewable energy still cannot compete with oil and gas.” Sacre bleu!

The UK government magic wand says it can generate 95% of energy from renewable sources by 2030. York, master of understatement, says the “target is now in jeopardy.”

Lordy, but the skeptics were right all along…

By Thomas York, at The Conversion*

Projects just kept getting bigger until it all broke:

The UK government’s strategy for tackling climate change received a major blow in May when Danish developer Ørsted announced that adverse economic developments had halted its 2.4-gigawatt (GW) Hornsea 4 wind farm in the North Sea.

Supply, meet demand: When everyone wants the same thing at the same time, prices rise

Building a wind turbine requires significant amounts of steel, copper and aluminium, all of which doubled or tripled in price between 2020 and 2023. Turbine manufacturers have raised prices in an effort to recover recent losses…

Impending national and international net zero targets also mean that developers globally are having to make earlier investments in transmission infrastructure. An exponential increase in demand for scarce high-voltage cabling has already led to high-profile cancellations of offshore wind farms in the US.

…  Rising demand for rare earth metals used to make magnets in turbine generators has also been snared by geopolitical issues.

There are just not enough boats:

Ørsted ceased work on its 2.2GW Ocean Wind development zone off the coast of New Jersey in 2023, citing a vessel delay in its decision to cancel the project.

According to the advocacy group WindEurope, demand for vessels capable of installing foundations and turbines and laying cables will outstrip availability within the next five years. The gap between the two is forecast to skyrocket between 2028 and 2030….

Delays caused by these issues can result in a problem known as “contract erosion”. In their contracts, developers have a commissioning window within which turbines have to start generating. If they are not operational within this time, they lose their subsidies on a day-by-day basis.

Ultimately, the market hath spoken:

Rising costs mean that even one of the world’s biggest wind farms, Dogger Bank in the North Sea, will not be profitable for its developer, Equinor. As a prospect for generating financial returns, renewable energy still cannot compete with oil and gas.

This is the key argument of economic geographer Brett Christophers in his recent book The Price is Wrong. Christophers argues that, if national governments continue to rely so heavily on private sector investment to build renewable energy, decarbonisation is unlikely to proceed as fast as it needs to. It is simply not profitable enough.

If the government had got out of the way and let the market speak twenty years ago without hiding the truth under a bonanza-fog of subsidies, we wouldn’t have wasted twenty years and trillions of dollars to find out it was not going to work.

_____________

*In 2019 The Conversation gave up conversing and banned skeptics. Thus, they became — The Conversion.

Hornsea 4 Cancelled By Orsted

This news today has driven a stake through the heart of Mad Miliband’s green energy plans

From NOT A LOT OF PEOPLE KNOW THAT

By Paul Homewood

h/t Hugh Sharman

This news today has driven a stake through the heart of Mad Miliband’s green energy plans:

Ørsted has today decided to discontinue the Hornsea 4 project in the UK in its current form. Since the Contract for Difference (CfD) award in allocation round 6 (AR6) in September 2024, the 2,400 MW Hornsea 4 project has seen several adverse developments relating to continued increase of supply chain costs, higher interest rates, and an increase in the risk to construct and operate Hornsea 4 on the planned timeline for a project of this scale.

In combination, these developments have increased the execution risk and deteriorated the value creation of the project. Therefore, Ørsted has taken the decision to stop further spend on the project at this time and terminate the project’s supply chain contracts, meaning that Ørsted will not deliver Hornsea 4 under the CfD awarded in AR6.
Ørsted will evaluate options for future development of the Hornsea 4 project given the continuing seabed rights, grid connection agreement and Development Consent Order.
Rasmus Errboe, Group President and CEO of Ørsted, says:
”We remain fully committed to being an important partner to the UK government to help them achieve their ambitious target for offshore wind build-out and appreciate the work they’ve done to deliver a clear framework to support offshore wind. However, our capital allocation is based on a strict and value-focused approach, and after careful consideration, we’ve decided to discontinue the development of the Hornsea 4 project in its current form, well ahead of the planned Final Investment Decision later this year.”
“We’ve been maturing the project over the past nine months and have been working relentlessly with stakeholders and suppliers to manage the different project risks for a project of this scale. Throughout the development phase we’ve been very diligent in our approach to capital commitment to our suppliers, and our committed capital is well below our threshold. The adverse macroeconomic developments, continued supply chain challenges, and increased execution, market and operational risks have eroded the value creation.”
“I’d like to emphasise that Ørsted continues to firmly believe in the long-term fundamentals of and value perspectives for offshore wind in the UK. We’ll keep the project rights for the Hornsea 4 project in our development portfolio, and we’ll seek to develop the project later in a way that is more value-creating for us and our shareholders.”
As a consequence of the decision, Ørsted expects to incur break-away costs of DKK 3.5 to 4.5 billion in 2025. The EBITDA impact is expected to be DKK 3.0 to 3.5 billion, this includes a write-down of the offshore transmission assets and a provision for contract cancellation fees (not part of guided EBITDA). In addition, capitalised construction costs of approx. DKK 0.5 to 1.0 billion will be written down (impact below EBITDA).
Ørsted’s previously guided EBITDA for 2025, excluding new partnership agreements and cancellation fees, of DKK 25-28 billion remains unchanged. Similarly, Ørsted’s gross investment guidance for 2025 is unchanged at DKK 50-54 billion.

https://orsted.com/company-announcement-list/2025/05/orsted-to-discontinue-the-hornsea-4-offshore-wind—143901911

Hornsea 4 would have brought 2400 MW of offshore wind power, due to be ready by 2029, but the current price of £84.97/MWh clearly was not viable for Orsted. So much so that they are taking a hit of 4.5 billion DKK, equivalent to £500 million, to pull out of the deal.

Allocation Round 6, which Hornsea 4 was part of, offered contracts of 3363 MW for offshore wind. With the cancellation of Hornsea, this just leaves the East Anglia Two project’s 963 MW.

There is also the question of the tranche of Hornsea 3 capacity, which Orsted switched from Allocation 5 to 6, in order to get a higher price. This capacity totalled 1080 MW, which I presume will also fall by the wayside, as presumably the whole contract is now null and void.

With Allocation Round 7 already in some doubt, due seemingly to lack of interest, there is absolutely no way now that Miliband will get the extra 35 GW of offshore wind he needs by 2030.

And if he wants more, he is going to have to pay a lot more for it,  destroying his claims that renewables are cheaper.

Orsted Likely to Cancel Hornsea Four

Orsted, the Danish owned wind power company, has been in deep trouble for a while now, as the combination of rising costs, the end of cheap money and shrinking subsidies have wrecked profitability.

From NOT A LOT OF PEOPLE KNOW THAT

By Paul Homewood

Orsted, the Danish owned wind power company, has been in deep trouble for a while now, as the combination of rising costs, the end of cheap money and shrinking subsidies have wrecked profitability.

Billions in capital write downs have already occurred, but now the cash is drying up:

Today, Ørsted’s Board of Directors approved adjustments to the company’s business plan towards a focused capital allocation to strengthen the capital structure. The company will prioritise the most value-accretive growth opportunities through a self-funded investment programme.

During 2024, Ørsted delivered full-year results in line with expectations, reaching an EBITDA excluding new partnerships and cancellation fees of DKK 24.8 billion. In addition, commissioning of 2.4 GW of renewable capacity took place, 3.5 GW of offshore wind capacity was awarded in the UK, and the final investment decision on the offshore wind farm Baltica 2 in Poland was made last week. All of which contribute to the strategic progress of the company.

Despite delivering full-year results in line with expectations and the strategic progress, Ørsted has experienced challenges, especially related to the US offshore wind portfolio, which have led to further pressure on our credit metric. This development, in combination with the wider renewable industry challenges, has led Ørsted to reduce its investment programme towards 2030 by around 25 % compared to its previous strategic ambition on a like-for-like basis. The reduced investment programme is in line with our commitment to ensure a capital structure that can support a solid investment grade credit rating

We’ll reduce our investment programme towards 2030 through a stricter, more value-focused approach to capital allocation. We do this to ensure a stronger balance sheet, supporting a solid investment grade rating, and to ensure that we only invest our capital in the most financially attractive opportunities.
“Our number one priority throughout the next three years will be to deliver on our committed 8.4 GW offshore wind construction programme, which will almost double our installed offshore wind capacity. The market remains challenging, but delivering on this programme will solidify our position as the undisputed global leader in offshore wind.”

These adjustments will not affect the execution of the 9 GW of renewable projects that Ørsted is currently constructing. The construction portfolio brings line of sight to an expansion of renewable capacity from 18 GW to more than 27 GW.

The previous ambition for installed renewable capacity of 35-38 GW by 2030 and the targeted EBITDA (excluding new partnerships) of approx. DKK 39-43 billion in 2030 have been discontinued.

https://orsted.com/en/company-announcement-list/2025/02/orsted-adjusts-its-business-plan-to-strengthen-the-142487181

In layman’s language, they are carrying on with 9 GW of projects already under construction, given that it would be far too costly to back out now.

But that’s it! The other 11 GW of new capacity planned has gone by the wayside.

This is necessary for two reasons:

1) They do not have the cash to invest

2) The new projects would not be profitable, given the current state of the market.

Orsted is the leading offshore wind developer in the UK, and probably the world.

In last year’s CfD auction, AR6 , Orsted won a contract to build the offshore wind farm Hornsea Project Four, with a capacity of 2400 MW.

It has however not yet been given the Final Investment Decision by Orsted. As construction has not started yet or even been approved, it is to be presumed that it will be one of the projects on the chopping block.

This would leave a massive hole in Ed Miliband’s plans to triple offshore wind capacity by 2030.

AR6 brought in 3363 MW of offshore wind, so three quarters looks like disappearing just like that.

Moreover it seems impossible that Orsted will bid at the next allocation round, AR7, and there appear to be no other major players willing to step up.

ScottishPower Renewables have already stated that East Anglia Two, which won the other AR6 contract, will be their last in that part of the North Sea. And Vattenfall pulled out of their CfD for the 1400 MW Norfolk Boreas in 2023.

The days of easy money for offshore wind developers, made possible  by obscene subsidies are long gone. It already appear that AR7 is running well behind schedule, which suggests that there is a lack of interest amongst developers for the prices on offer.

My guess is that Miliband will be forced to substantially raise the strike prices if he wants more capacity.

Ørsted suspends dividend, cuts jobs and exits offshore wind markets

The world’s largest offshore wind developer Ørsted is suspending its dividend, cutting jobs and exiting several markets as the group plots a recovery from a calamitous 12 months.

Wind developer says moves needed to create ‘leaner and more efficient company’.

The world’s largest offshore wind developer Ørsted is suspending its dividend, cutting jobs and exiting several markets as the group plots a recovery from a calamitous 12 months.

Ørsted said on Wednesday it would “pause” dividends for 2023-2025, cut as many 800 jobs and retreat from markets in Norway, Spain and Portugal. The Financial Times has the story.

Chief executive Mads Nipper is battling to restore investor confidence after an overly aggressive expansion in US market and higher interest rates left the Danish group facing multibillion dollar impairments.

The measures announced on Wednesday are designed to make Ørsted a “leaner and more efficient company”, Nipper said.

As the group, which is 50.1 per cent owned by the Danish government, tries to stabilise itself, chair Thomas Thune Andersen will step down after almost a decade in the job. Andersen’s exit comes after former finance chief Daniel Lerup and chief operating officer Richard Hunter left in November.

Ørsted’s struggle reflects the pressures facing the wider industry, which investors had championed until higher interest rates, overly ambitious expansion plans and supply chain disruption hit the sector over the past two years.

However, Ørsted has been particularly exposed in part because of its large presence in the still embryonic US market, where it has struggled to get tax credits and complained of onerous requirements for parts to be made locally.

Read the full story here.

Ofgem to investigate claims of wind farms overcharging billpayers millions

Ofgem said it was investigating the alleged behaviour and has asked the Energy System Operator (ESO) to look into the matter.

Energy regulator Ofgem is investigating the claims that wind farms may have incorrectly added close to £51m to taxpayer bills since 2018.

A Bloomberg report found that 40 out of 121 studied projects overstated their output by ten per cent on average and one-sixth (27) wind farms were found to be overstating by at least 20 per cent. The CityAM has the story.

Ofgem said it was investigating the alleged behaviour and has asked the Energy System Operator (ESO) to look into the matter.

 “Ofgem will work closely with the ESO to consider all the facts and if it finds evidence of egregious action or market abuse, enforcement action will follow,” the spokesperson told City A.M.

“We will continue to work to protect market integrity and the best interests of consumers, as demonstrated by the recent cases we have concluded against generators who charged excessive prices behind transmission constraints.”

The report has reached government ears and parliamentary under-secretary of state for nuclear and networks Andrew Bowie said in response to its findings: “It is completely unacceptable to overcharge for people’s bills.

“British energy generators must operate at the highest standards,” he added.

Bloomberg caveated its report saying that while it is “impossible to determine precisely how much bill payers have had to pay due to such overstatements, but by assuming a similar rate of overestimation during the times that those 40 farms were paid to stop generating, consumers would have overpaid an estimated £51m ($65m) since 2018”.

Read the full story here.

Key Player In Biden’s Offshore Wind Push Withdraws From Deal With Blue State, Blames Inflation

A major offshore wind developer announced Thursday that it withdrew from a deal with a state utility regulator for two offshore wind projects, citing inflation and other economic pressures.

From The Daily Caller

NICK POPE

CONTRIBUTOR

A major offshore wind developer announced Thursday that it withdrew from a deal with a state utility regulator for two offshore wind projects, citing inflation and other economic pressures.

Ørsted, a key corporate player in the Biden administration’s offshore wind agenda, has backed out of the Maryland Public Service Commission’s (MPSC) orders approving the company’s Skipjack 1 and 2 projects off the Maryland coast, the company announced Thursday. The company said that inflationary pressure, high borrowing costs and supply chain problems have combined to make the state’s subsidies economically unviable, but that it is not yet abandoning the projects and will continue to pursue permits, according to a regulatory filing with the MPSC.

“Today’s announcement affirms our commitment to developing value creating projects and represents an opportunity to reposition Skipjack Wind, located in a strategically valuable federal lease area and with a state that’s highly supportive of offshore wind, for future offtake opportunities,” David Hardy, the executive vice president and CEO of region Americas at Ørsted, said in a Thursday statement. “As we explore the best path forward for Skipjack Wind, we anticipate several opportunities and will evaluate each as it becomes available. We’ll continue to advance Skipjack Wind’s development milestones, including its construction and operations plan.”  (RELATED: Blue State Doubles Down On Offshore Wind After 2023’s Massive Failure)

701662695-Skipjack-Letter-Withdrawing-From-OREC-OrdersHerunterladen

“The statutorily-mandated caps on the residential ratepayer impacts have very little room left,” an MPSC spokesperson told the Daily Caller News Foundation. The state cannot raise those caps in the absence of legislative action, the spokesperson added.

The withdrawal is the latest sign of trouble for Ørsted, which pulled the plug on two major projects off the New Jersey coast in October 2o23 after many of the same underlying factors made those projects untenable. At one point, the company appeared poised to become a major beneficiary of the Inflation Reduction Act (IRA), President Joe Biden’s signature climate bill, but the mounting macroeconomic problems that have beleaguered the economy through his first term have weighed heavily on the company.

“Yesterday’s news from Ørsted is disappointing — the Skipjack project was an important component in advancing Maryland’s clean energy goals,” MPSC Chair Frederick Hoover said of the withdrawal. “However, the Commission remains optimistic about the future of the offshore wind industry in Maryland, and would note that the US Wind project continues to move through the federal approval process.”

The withdrawal is the latest sign of distress for the Biden administration’s offshore wind goals, especially if it turns out to be a precursor for the eventual collapse of the company’s Maryland projects. The White House is aiming for offshore wind to produce enough electricity to power more than 10 million American homes by 2030, but that goal now appears to be firmly out of reach, according to Reuters.

Neither Ørsted nor the White House responded immediately to requests for comment.

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