Ørsted Halts Work in a large UK wind farm citing increasing costs

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The largest offshore wind developer in the world is stopping work in a wide UK project that blames costs and risk of delays, with a blow to Britain’s net energy goals.

Ørsted said that on Wednesday he was leaving for contracts and cancellation for his Horrsea 4 project in the North Sea, a 2.4 Gigawatt project that would have been able to feed more than one million homes.

The project won a UK government contract last year guaranteeing a fixed price of £ 58.87 electricity per hour of Megawatt but Ørsted He said that he could not currently make the proposed wind sort.

“Adverse macroeconomic developments, continuous challenges of the supply chain, and the increase in execution, the market and operational risks have eroded the creation of value,” said CEO Rasmus Erboe.

He added that the company would maintain development rights and “try to develop the project later so that it is more created for us and our shareholders.”

The Danish energy company said that the decision would cost him this year DKR3.5BN-DKR4.5BN (£ 399 million £ 513 million) in rupture costs for contracts canceled with suppliers.

The UK government wants wind capacity outside the country to expand more than three by 2030 to achieve its goal of decarbing the electric system.

Horrsea 4, on the Yorkshire Coast, was the off -sea wind farm to get a government contract in last year’s auction round and one of the only two projects they have for the first time.

Ørsted’s decision occurs when he tries to restore his credibility with shareholders after bruises in which he has also moved away from out -of -coast projects in the United States.

Erboe, a company’s privileged, was appointed CEO in January to replace the predecessor Mads Nipper, who presided over an 80 percent fall on the company’s actions price since January 2021. The company is currently valued in DKR112BN ($ 12.7 million).

The wind sector outside the coast has fought against the growing costs in recent years derived from strains of the highest supply chain and rates. This year the industry has been affected by the decision of the President of the United States, Donald Trump, to suspend development permits.

Erboe warned last month that the industry was at risk of a “descending spiral” and asked European governments to do more to support the sector.

The suspension of the Horrsea 4 project follows the decision of the Swedish opponent of Vattenfall, in July 2023, to remove his 1.4 GW wind project on the Norfolk coast due to the increase in costs.

The project, Norfolk Boreas, was later sold to the German energy group RWE, which plans to develop it.

The United Kingdom Energy Security Department and Net Zero said he would “work with Ørsted to return to Horrsea 4 on the court.”

A spokesman for the Department added: “We recognize the effect that restrictions on inflation and supply chain worldwide are having on industry across Europe. We have a strong project of projects to offer clean energy by 2030.”