Orsted delays US offshore wind project

Ørsted is delaying construction and commissioning of a US offshore wind farm project, which has caused impairment losses in the second quarter of the year, the world’s largest offshore wind developer said on Thursday.

Wind energy developers warned earlier this year that last year’s challenges for the industry would continue into 2024.

The wind energy industry, particularly offshore wind, is grappling with issues related to rising costs, rising interest rates, turbine quality issues, and project delays and cancellations.

In his half-year report for 2024, Orsted Group President and CEO Mads Nipper said today that “despite promising progress in our US offshore wind project Revolution Wind, construction of the onshore transformer station for the project has been delayed.”

The director added that this delay will result in the project’s commercial launch date being pushed back from 2025 to 2026.

Revolution Wind is an offshore wind project that is expected to generate 704 megawatts (MW) of clean energy – delivering 304 MW to Connecticut and 400 MW to Rhode Island. The offshore project is located approximately 15 miles south of the Rhode Island coast, 32 miles southeast of the Connecticut coast, and 12 miles southwest of Martha’s Vineyard.

As a result of the delay, however, Orsted booked an impairment loss of USD 310 million (DKK 2.1 billion) for the second quarter. This negative expense is on top of another impairment loss of USD 221 million (DKK 1.5 billion) resulting from Orsted’s decision to discontinue FlagshipONE, an e-methanol project that was to be implemented in Sweden.

Referring to FlagshipONE, Orsted’s Nipper commented: “The liquid e-fuel market in Europe is developing slower than expected. We have made a strategic decision to deprioritize our activities in this market and discontinue development of FlagshipONE.”

Despite this, the company intends to continue to focus on its development work in the area of ​​renewable hydrogen, which it said is essential to decarbonising key industries in Europe and is closer to its core business.

Author: Tsvetana Paraskova for Oilprice.com

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