– Very frustrating – E24

– Very frustrating – E24

Ørsted, Equinor and BP have all invested billions in offshore wind energy in the USA. Now Ørsted is reducing values ​​by 45 billion and dropping two American projects.


Ørsted dropped the Ocean Wind 1 and 2 projects outside New Jersey and recorded a value of DKK 28.4 billion. This equates to 45 billion Norwegian kroner. Most of this (DKK 19.9 billion) is related to Ocean Wind 1.

It comes out in one message Regarding the Danish offshore wind developer Quarterly result Wednesday.

On Wednesday morning, Ørsted shares fell 20 percent on the Copenhagen Stock Exchange.

“We are very disappointed to announce that we have completed the development of Ocean Wind 1 and 2,” says Mads Nipper, CEO of Ørsted.

– Nipper says a significant negative development with challenges in supply chains delaying project timelines and rising interest rates led to this decision.

Last week, Equinor wrote down the value of half of its offshore wind projects Empire Wind 1 and 2 and Beacon Wind outside New York by NOK 3.3 billion. Yesterday, BP wrote down the value of half of the same projects by NOK six billion.

Ørsted CEO Mads Nipper (TV), here in New York in conversation with David Hardie, who heads the company's US operations.

– Outrageous

American media He writes The development in the offshore wind market is negative for President Joe Biden, who has done so I fired the target To have about 30 GW of offshore wind power by 2030. Norway has the same target, but for 2040.

Ørsted’s two abandoned offshore wind farms are planned outside New Jersey. The development may create challenges for the state’s conversion plans 100% clean energy by 2035.

– The decision taken by Ørsted today to abandon its obligations to New Jersey is an outrageous decision and raises doubts about the company’s credibility and competence. He says New Jersey Governor Phil Murphy in a statement.

– I have asked my administration to take all necessary steps to ensure that Ørsted fully fulfills its obligations.

-More delay

The offshore wind industry has faced cost issues recently, following challenges in supply chains and rising raw material costs.

Recently, there were no bids for offshore wind in the UK renewable energy auction round. Industry organization Fornybar Norge fears there will be no bids in the upcoming Norwegian offshore wind round.

“Ørsted has decided to halt development of the Ocean Wind 1 and 2 projects. This is a result of further delays between suppliers impacting the project timeline and resulting in further significant delays,” Ørsted wrote.

Both Equinor and BP say they are in the box thinking regarding the future of their projects in the US. The Nyserda Authority recently rejected developers’ desire to increase the guaranteed electricity price for the Empire Wind 1 and 2 and Beacon Wind plants by an average of about 50 percent.

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New York has one Goal 70 percent of the state’s electricity must come from renewable sources by 2030.

Read also

No bids for UK offshore wind projects: concern over Norwegian auction

– Very serious

Offshore wind industry director John Evange at Renewable Norway is cautiously optimistic, even though offshore wind costs have increased a lot.

Industry Director for Offshore Wind John Evange at Renewable Norway.

– There is every reason to believe that this is temporary. It’s about the extraordinary increases in costs that result directly and indirectly from Russia’s war against Ukraine, as well as the pressure on supply chains because many countries and companies have commitments and targets until 2030, Evange tells E24.

– So what is happening now is not a disaster?

– The matter is of course very dangerous, in the short and medium term. Offshore wind is a long-term investment, and we will eventually see costs decline as a result of expansion and learning, on par with what we have achieved in solar and onshore wind, Evange says.

The winds of revolution begin

Ørsted already announced in August that the company would write off billions of dollars worth of offshore wind energy in the USA. The company notes that since then, the development has been exacerbated, among other things, by challenges in supply chains and increased interest rates.

Although Ørsted is now canceling two projects, it has not given up on offshore wind in the United States. The company says it has made an investment decision on the Revolution Wind project off Connecticut and Rhode Island. The project has a capacity of 704 MW and is jointly owned by Eversource.

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“We are continuing with Revolution Wind in the construction phase, with attractive value creation prospects,” says Nipper.

The scent of offshore wind contributes to Ørsted’s post-tax profit of DKK 22.6 billion in the third quarter. The result in the same quarter last year was DKK 9.4 billion, according to the report Quarterly report.

Hanisi Anenih

Hanisi Anenih

"Web specialist. Lifelong zombie maven. Coffee ninja. Hipster-friendly analyst."

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