Orsted postpones US offshore wind project

Orsted is delaying construction and commissioning of a US offshore wind project, resulting in impairment losses incurred for the second quarter of the year, the world’s largest offshore wind developer said on Thursday.

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

The wind industry, particularly offshore wind, has been hit by cost increases, rising interest rates, quality problems with turbines and project delays and cancellations.

In its mid-2024 interim report, Orsted Group Chairman and CEO Mads Nipper said today that “Despite encouraging progress on our Revolution Wind offshore wind project in the US, construction of the onshore substation for the project has been delayed.”

This delay will push the project’s commercial operation date from 2025 to 2026, the executive added.

Revolution Wind is an offshore wind project planned to generate 704 megawatts (MW) of clean energy – providing 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, Orsted recorded an impairment loss of USD 310 million (DKK 2.1 billion) for the second quarter. This negative charge is in addition to another impairment loss of $221 million (1.5 billion kroner) resulting from Orsted’s decision to cease execution of FlagshipONE, an e-methanol project that was planned to be built in Sweden.

Referring to FlagshipONE, Orsted’s Nipper commented that “The e-liquid market in Europe is developing more slowly than expected and we have made the strategic decision to de-prioritize our efforts in the market and cease development FlagshipONE”.

However, the company will continue to focus on development efforts in renewable hydrogen, which it said is critical to the decarbonisation of Europe’s key industries and is closer to its core business.

By Tsvetana Paraskova for Oilprice.com

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