Latest news with #RasmusErrboe
Business Mayor
11-05-2025
- Business
- Business Mayor
Danish firm shelves huge UK windfarm project over rising costs
The world's biggest wind power developer has cancelled plans for one of the UK's largest offshore windfarms, in a significant blow to the government's green energy targets. The Danish wind power company Ørsted said the Hornsea 4 project no longer made economic sense because of soaring costs in the industry's global supply chain, after it won a government contract last year. The decision to halt work on the project is a major blow to the government's plan to quadruple the UK's offshore wind capacity by the end of the decade to help create a virtually fossil-fuel-free electricity system. The fourth phase of the huge Hornsea windfarm, located off the Yorkshire coast, was expected to use 180 giant turbines to generate enough green electricity to power the equivalent of 1m homes, or 2.4 gigawatts of power capacity. Ørsted's chief executive, Rasmus Errboe, said 'the combination of increased supply chain costs, higher interest rates and increased execution risk' meant the project was unlikely to provide value for the company. The project is the latest to be derailed by increased costs caused by higher inflation and interest rates combined with problems in the global offshore wind supply chain in recent years. Last year Ørsted scrapped two offshore wind projects off the US coast because of concerns over rising costs and delayed the start of a third project off the coast of Rhode Island and Connecticut by a year, to 2026. In 2023 the Swedish energy company Vattenfall stopped work on the multibillion-pound Norfolk Boreas windfarm in the North Sea, which was designed to power the equivalent of 1.5m British homes, because it was no longer profitable. Ørsted said on Wednesday that the wind industry faced short-term challenges such as supply chain issues and 'regulatory and macroeconomic developments'. Such problems have led to concerns over the UK government's renewable energy goals, piling pressure on its auction for new renewable energy contracts. The government plans to double the UK's onshore wind, triple its solar power and quadruple its offshore wind power capacity by the end of the decade. It hopes to relegate gas plants to just 5% of the UK's electricity generation by 2030 to create a clean power system. Dhara Vyas, the chief executive of Energy UK, which represents the industry, said the loss would 'raise the stakes' on the the next auction round, due in the summer, and it was 'vital that the government doubles down to ensure [it] is a success'. Jane Cooper, the deputy chief executive of RenewableUK, another industry group, said the auction's parameters should reflect the industry's costs. Cooper also called on the government to rule out the introduction of controversial plans to overhaul the electricity market by introducing 'zonal pricing', which she said would 'drive the cost of investment up even further'. skip past newsletter promotion Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy. We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply. after newsletter promotion A government spokesperson said it continued to have 'a strong pipeline of projects' to provide clean power by 2030 and it would work with Ørsted to get Hornsea 4 back on track. The spokesperson added: 'Through our mission we will deliver an energy system that brings energy bills down for good and bolsters Britain's energy security as part of our plan for change.' For US windfarm developers the economic challenges facing the industry have been compounded by the incoming Trump administration's vow to end offshore wind development 'on day one'. It has issued a stop-work order to a major offshore wind project developed by Norway's state energy company Equinor. However, Ørsted said the long-term outlook for offshore was strong because of the world's growing demand for electricity and a fresh focus on 'energy security and affordability' that renewable energy provides. It has been a turbulent time for Ørsted: it implemented a restructuring plan in 2024, and it cancelled dividend payouts to shareholders for the 2023-25 financial years in an attempt to bolster its finances. Its market value has plunged by about 80% since its peak in 2021. Britain's offshore energy industry took another blow on Wednesday when the largest oil and gas producer in the North Sea set out plans to shrink its Aberdeen-based workforce by a quarter. Harbour Energy blamed the UK government's windfall tax on North Sea oil and gas revenues – the so-called energy profit levy – for its financial struggles, which could lead to up to 250 jobs being cut from the company in the coming months.
Yahoo
08-05-2025
- Business
- Yahoo
Danish firm shelves huge UK windfarm project over rising costs
The world's biggest wind power developer has cancelled plans for one of the UK's largest offshore windfarms, in a significant blow to the government's green energy targets. The Danish wind power company Ørsted said the Hornsea 4 project no longer made economic sense because of soaring costs in the industry's global supply chain, after it won a government contract last year. The decision to halt work on the project is a major blow to the government's plan to quadruple the UK's offshore wind capacity by the end of the decade to help create a virtually fossil-fuel-free electricity system. The fourth phase of the huge Hornsea windfarm, located off the Yorkshire coast, was expected to use 180 giant turbines to generate enough green electricity to power the equivalent of 1m homes, or 2.4 gigawatts of power capacity. Ørsted's chief executive, Rasmus Errboe, said 'the combination of increased supply chain costs, higher interest rates and increased execution risk' meant the project was unlikely to provide value for the company. The project is the latest to be derailed by increased costs caused by higher inflation and interest rates combined with problems in the global offshore wind supply chain in recent years. Last year Ørsted scrapped two offshore wind projects off the US coast because of concerns over rising costs and delayed the start of a third project off the coast of Rhode Island and Connecticut by a year, to 2026. In 2023 the Swedish energy company Vattenfall stopped work on the multibillion-pound Norfolk Boreas windfarm in the North Sea, which was designed to power the equivalent of 1.5m British homes, because it was no longer profitable. Ørsted said on Wednesday that the wind industry faced short-term challenges such as supply chain issues and 'regulatory and macroeconomic developments'. Such problems have led to concerns over the UK government's renewable energy goals, piling pressure on its auction for new renewable energy contracts. The government plans to double the UK's onshore wind, triple its solar power and quadruple its offshore wind power capacity by the end of the decade. It hopes to relegate gas plants to just 5% of the UK's electricity generation by 2030 to create a clean power system. Dhara Vyas, the chief executive of Energy UK, which represents the industry, said the loss would 'raise the stakes' on the the next auction round, due in the summer, and it was 'vital that the government doubles down to ensure [it] is a success'. Jane Cooper, the deputy chief executive of RenewableUK, another industry group, said the auction's parameters should reflect the industry's costs. Cooper also called on the government to rule out the introduction of controversial plans to overhaul the electricity market by introducing 'zonal pricing', which she said would 'drive the cost of investment up even further'. A government spokesperson said it continued to have 'a strong pipeline of projects' to provide clean power by 2030 and it would work with Ørsted to get Hornsea 4 back on track. The spokesperson added: 'Through our mission we will deliver an energy system that brings energy bills down for good and bolsters Britain's energy security as part of our plan for change.' For US windfarm developers the economic challenges facing the industry have been compounded by the incoming Trump administration's vow to end offshore wind development 'on day one'. It has issued a stop-work order to a major offshore wind project developed by Norway's state energy company Equinor. However, Ørsted said the long-term outlook for offshore was strong because of the world's growing demand for electricity and a fresh focus on 'energy security and affordability' that renewable energy provides. It has been a turbulent time for Ørsted: it implemented a restructuring plan in 2024, and it cancelled dividend payouts to shareholders for the 2023-25 financial years in an attempt to bolster its finances. Its market value has plunged by about 80% since its peak in 2021. Britain's offshore energy industry took another blow on Wednesday when the largest oil and gas producer in the North Sea set out plans to shrink its Aberdeen-based workforce by a quarter. Harbour Energy blamed the UK government's windfall tax on North Sea oil and gas revenues – the so-called energy profit levy – for its financial struggles, which could lead to up to 250 jobs being cut from the company in the coming months. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
E&E News
08-05-2025
- Business
- E&E News
2 offshore wind projects move forward despite Trump's threats
An offshore wind project serving Rhode Island and Connecticut is 75 percent complete, and a second facility off of New York is more than a third done, Ørsted said Wednesday. The fate of Ørsted's U.S. projects have been the subject of intense speculation following the Interior Department's decision last month to halt work on a competitor's offshore wind facility in New York called Empire Wind. Ørsted CEO Rasmus Errboe told financial analysts during the company's quarterly earnings call Wednesday that the Danish wind developer was in 'ongoing, constructive dialog' with the Bureau of Ocean Energy Management, the division of the Interior Department that oversees offshore wind permitting. Advertisement 'I'm not going to speculate about potential regulatory changes in the U.S. that is outside of our control,' he said. 'Our two projects have completed multiyear reviews and have also followed all state and federal procedures.'
The Independent
08-05-2025
- Business
- The Independent
Windfarm which could power 1 million UK homes scrapped over rising costs
Orsted, the world's leading offshore wind developer, has announced it is halting work on its Hornsea 4 project, a significant setback for the UK government 's clean energy ambitions. The planned North Sea wind farm, projected to power more than a million homes, has fallen victim to escalating costs and financial risks. The company cited rising supply chain expenses, increased interest rates, and the growing risk of project delays as key factors in its decision. These challenges, Orsted explained, have "increased the execution risk and deteriorated the value creation of the project." This announcement comes as a blow to the UK's ambitious renewable energy targets. The government aims to significantly expand the nation's renewable energy capacity, primarily through offshore and onshore wind and solar power, as part of its strategy to decarbonise the power grid by 95 per cent by 2030. The Hornsea 4 project was expected to play a major role in achieving this goal. Chief executive Rasmus Errboe said: 'I'd like to emphasise that Orsted continues to firmly believe in the long-term fundamentals of and value perspectives for offshore wind in the UK. 'We'll keep the project rights for the Hornsea 4 project in our development portfolio, and we'll seek to develop the project later in a way that is more value-creating for us and our shareholders.' The Danish energy company said the move could cost it up to £513 million in break costs from cancelling contracts with suppliers. A spokesperson for the Department for Energy Security and Net Zero said: 'We recognise the effect that globally high inflation and supply chain constraints are having on industry across Europe, and we will work with Orsted to get Hornsea 4 back on track. 'We have a strong pipeline of projects to deliver clean power by 2030 and our mission-led approach ensures we can steer our way through global pressures and individual commercial decisions to reach our targets.' Orsted has had a difficult few years, after high interest rates worsened the economics of developing renewable energy, and it recently replaced its former chief executive with Mr Errboe earlier in 2025. It said in February that it would cut investment to 2030 by 25 per cent, as part of an attempt to restore its falling share price, which has dropped more than one-third in the last year. Meanwhile, the state-backed firm's recent foray into the US was also delivered a significant blow when Donald Trump was elected, promising to halt green energy and refocus on fossil fuels. Andrew Bowie, the Conservative acting shadow energy secretary, said the decision indicated that the UK Government 's net zero goal is 'not sustainable'.
News24
07-05-2025
- Business
- News24
Danish firm Orsted halts huge UK offshore wind farm project
Danish renewables firm Orsted said Wednesday it was shelving plans to build a massive wind farm off the UK coast due to rising costs, dealing a setback to Britain's clean energy goals. The 2 400-megawatt Hornsea 4 project would have complemented two existing Orsted wind farms and a third under construction. But Orsted said in a statement that the project "has seen several adverse developments", including rising supply chain costs, higher interest rates and an increased risk in building it on the planned timeline. "We've decided to discontinue the development of the Hornsea 4 project in its current form," Orsted chief executive Rasmus Errboe said. "The adverse macroeconomic developments, continued supply chain challenges, and increased execution, market and operational risks have eroded the value creation," he added. The existing Hornsea 1 and 2 wind farms and the Hornsea 3 project will have a combined capacity exceeding five gigawatts. Orsted said shelving the Hornsea 4 project would cost the company between 3.5 billion and 4.5 billion kroner ($533 million and $685 million). "I'd like to emphasise that Orsted continues to firmly believe in the long-term fundamentals of and value perspectives for offshore wind in the UK," Errboe said. "We'll keep the project rights for the Hornsea 4 project in our development portfolio, and we'll seek to develop the project later in a way that is more value-creating for us and our shareholders." The British government said it would work with Orsted to revive the project. "We recognise the effect that globally high inflation and supply chain constraints are having on industry across Europe," said a spokesperson for Britain's Department for Energy Security and Net Zero. "We will work with Orsted to get Hornsea 4 back on track," the spokesperson said. Orsted was already dealt a $4 billion blow in 2023 when it cancelled wind farm projects in the United States, a crucial market for the group. Now the entire sector faces a major challenge in the United States after President Donald Trump froze federal permitting and loans for all offshore and onshore wind projects. Orsted also reported first-quarter results on Wednesday showing sales rose eight percent to 20.7 billion kroner, lower than the 21.7 billion kroner forecast by analysts surveyed by financial data firm FactSet. Its net profit, however, nearly doubled to 4.8 billion kroner.
