The Danish Society for Renewable Energies, Orsted, said on Wednesday that it had plans to build a massive wind farm off the British coast due to the increase in costs, which made the reverse with the objectives of the own energy of Great Britain.
The project of 2,400 megawatts Hornsea 4 would have completed two existing Orsted wind farms and a third under construction.
But Orsted said in a statement that the project “has experienced several unfavorable developments”, including the increase in the costs of the supply chain, higher interest rates and an increased risk to its construction on the scheduled calendar.
“We have decided to stop the development of the Hornsea 4 project in its current form,” said Orsted Director, Rasmus Errboe.
“Disapporable macroeconomic developments, continuous challenges of the supply chain and the increase in execution, market and operational risks have eroded value creation,” he added.
Hornsea 1 and 2 existing wind farms and the Hornsea 3 project will have a combined capacity exceeding five gigawatts.
Orsted said that the Hornsea 4 project would cost the company between 3.5 billion and 4.5 billion kroner ($ 533 million and $ 685 million).
“I would like to emphasize that Orsted continues to firmly believe in the long-term fundamental principles and the value of the Offshore Wind perspectives in the United Kingdom,” said Errboe.
“We will keep the rights of the project for the Hornsea 4 project in our development portfolio, and we will seek to develop the project later in a way that is more created by the value for us and our shareholders.”
The British government said it would work with Orsted to relaunch the project.
“We recognize the effect that inflation and supply chain constraints on a global scale have industry across Europe,” said a spokesperson for the British Energy Security and Net zero department.
“We will work with Orsted to recover Hornsea 4 on the right track,” said the spokesperson.
Orsted has already undergone $ 4 billion in 2023 when canceling wind parks in the United States, a crucial market for the group.
Now, the entire sector is facing a major challenge in the United States after President Donald Trump froze federal permits and loans for all offshore and onshore wind projects.
ORSTED also announced on Wednesday the results of the first quarter showing that sales increased by 8% to 20.7 billion Kroner, less than 21.7 billion crèche forecasts by analysts interviewed by Financial Data Factst.
Its net profit, however, almost doubled at 4.8 billion kroner.
CBW / LTH / YAD
