Orsted said it was taking measures to shore up its finances in a challenging market.
Denmark’s Orsted, the world’s biggest offshore wind developer, is cutting its 2030 investment program by 25 percent as the industry grapples with rising costs and supply chain issues, the company stated on Feb. 5.
Orsted develops, constructs, and operates offshore and onshore wind farms, solar farms, energy storage facilities, renewable hydrogen and green fuels facilities, and bioenergy plants.
It operates 12 offshore wind farms in the UK, including Hornsea 1, which held the title of the world’s largest wind farm until its sister project, Hornsea 2, came into operation with 165 turbines in August 2022.
The company stated that it is taking measures to shore up its finances in a challenging market.
It also stated that it sees no need to raise new cash and that a revised plan will allow the group to keep cutting costs, given that it will construct at a slower pace than previously planned.
“We’ll reduce our investment programme towards 2030 through a stricter, more value-focused approach to capital allocation,” Orsted CEO Rasmus Errboe said in a statement on Feb. 5 on the company’s website. “We do this to ensure a stronger balance sheet.”
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The news comes just days after Orsted announced the departure of former CEO Mads Nipper.
Nipper, who had been in charge since 2021, came under pressure as losses mounted and Orsted’s share price fell.
In January, data from the London Stock Exchange Group showed that the company’s market value had declined by about 83 percent from its 2021 peak.
“The impacts on our business of the increasingly challenging situation in the offshore wind industry … mean that our focus has shifted,” Lene Skole, Orsted chair, said in a statement at the time. “Therefore, the board has today agreed with Mads Nipper that it’s the right time for him to step down.”
Orsted stated on Feb. 6 that most of its projects are progressing according to plan, but it warned that it continues to face supply chain and construction challenges at its two U.S. offshore construction projects, Revolution Wind and Sunrise Wind. Both are off the Northeastern U.S. coast.
“It would not be right for me to issue any guarantees in terms of further impairments,” Errboe said, referring specifically to the two U.S. projects.
President Donald Trump’s shift in energy policy means that the United States is rolling back on wind and solar while pushing for more domestic drilling and exports of liquefied natural gas.
Trump suspended offshore wind leases on his first day in office.
Trump’s action is a shift from the previous administration’s four-year effort to expand wind-power leasing, which had the goal of building 30 gigawatts of offshore wind power by 2030 and another 15 gigawatts of floating offshore wind power by 2035.
‘Slow Car Crash’
Researcher Ben Pile, who runs the Climate Debate UK campaign group, told The Epoch Times that he believes the entire green energy agenda is “like a very slow car crash.”
“All of its parts are on a collision course with reality,” he said via email.
Throughout Europe, governments have advanced “increasingly draconian climate and energy policies” in the belief that this would kickstart domestic industries, Pile said.
“But even despite sky-high energy prices and huge subsidies, green energy developers simply cannot survive,” he said.
Pile said the promises of green economic growth, green industries, and green jobs “have not delivered, and they are not going to be delivered.”
The Epoch Times reached out to Orsted, but the company declined to comment.
According to a 2024 report by energy analyst David Turver, published by the free market think tank The Institute of Economic Affairs, UK industrial electricity prices, at 25.85 pence per kilowatt-hour (about 32 cents per kilowatt-hour), are among some of the highest in the world.
Turver noted that the government has committed to a decarbonized grid by 2030.
“Pushing even more renewables on to the grid is bound to increase electricity costs even further, crushing our competitiveness,” his report stated.
Scottie Barnes and Reuters contributed to this report.
