Ørsted has halted the development of the Hornsea 4 offshore wind farm in the UK. The 2.4 GW project encountered escalating supply chain costs, higher interest rates, and increased construction and delivery risks since the Contract for Difference (CfD) award in Allocation Round 6 (AR6) in September 2024.
These issues have heightened execution risk and diminished the project’s value, prompting Ørsted to cease further spending and terminate supply chain contracts. Consequently, Hornsea 4 will not proceed under the CfD awarded in AR6.
“The adverse macroeconomic developments, ongoing supply chain challenges, and heightened execution, market, and operational risks have undermined value creation,” stated Rasmus Errboe, Group President and CEO of Ørsted.
Ørsted plans to explore future options for Hornsea 4, considering existing seabed rights, a grid connection agreement, and development consent order.
“We remain dedicated to partnering with the UK government to achieve their offshore wind targets and value the framework they’ve established to support this sector,” commented Errboe.
“Our capital allocation follows a strict, value-focused approach, leading us to discontinue the Hornsea 4 project in its current form prior to the Final Investment Decision this year.”
As a result of this decision, Ørsted anticipates incurring breakaway costs of DKK 3.5 billion (around EUR 470 million) to DKK 4.5 billion (approximately EUR 603 million), including a write-down of offshore transmission assets and a provision for contract cancellation fees.
Additionally, capitalized construction costs of approximately DKK 0.5 to 1 billion will be written down.
The Hornsea 4 offshore wind farm received consent from the Secretary of State for the Department of Energy Security and Net Zero in July 2023.
Geotechnical survey work began at the site, located 69 kilometers off the Yorkshire coast, in February 2025.
Ørsted Reaches 10 GW of Installed Offshore Capacity
“I’m pleased with our operational performance and earnings in Q1 2025. We remain focused on executing our strategic priorities. The quarter saw solid operational earnings, supporting our full-year guidance, and we continued our farm-down program,” stated Errboe.
“We also progressed our construction portfolio, commissioning the Gode Wind 3 offshore wind farm in Germany, resulting in over 10 GW of installed offshore capacity.”
Operating profit (EBITDA) for Q1 2025 was DKK 8.9 billion (approx. EUR 1.2 billion), up from DKK 7.5 billion (approx. EUR 1 billion) the previous year. Offshore site earnings reached DKK 7.7 billion, boosted by the ramp-up at the 253 MW Gode Wind 3 offshore wind farm in Germany and higher availability, though offset by lower wind speeds.
Return on capital employed (ROCE) was 4.6 percent. Adjusted ROCE for impairment losses and cancellation fees in Q1 2025 was 10.2 percent.
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