Ørsted Halts Hornsea 4 Offshore Wind Project in the UK

Danish offshore wind developer Ørsted has made the decision to discontinue the Hornsea 4 offshore wind project in the UK due to rising costs and increased risks associated with its development. The company cited a number of factors that have contributed to this decision since the contract for difference (CfD) award in September 2024.

According to Ørsted, the 2.4GW Hornsea 4 project has experienced challenges such as continued increases in supply chain costs, higher interest rates, and heightened risks in constructing and operating a project of this scale within the planned timeline. These developments have significantly increased the execution risk and diminished the value creation of the project, leading the company to halt further spending and terminate supply chain contracts.

Despite discontinuing the project, Ørsted has indicated that it will explore options for the future development of Hornsea 4, leveraging existing seabed rights, grid connection agreements, and development consent orders. However, the decision to cancel the project will result in breakaway costs of DKK 3.5-4.5bn ($533m-$685m) in 2025, with an expected EBITDA impact of DKK 3-3.5bn ($457m-$533m).

Ørsted’s President and CEO, Rasmus Errboe, emphasized the company’s commitment to a value-focused capital allocation strategy, stating, “Our decision to discontinue the development of the Hornsea 4 project reflects our rigorous approach to value creation. The adverse macroeconomic conditions, supply chain challenges, and increased risks have eroded the project’s value proposition.”

Errboe also mentioned that Ørsted will retain the project rights for Hornsea 4 in its development portfolio, with plans to revisit the project in a manner that maximizes value for the company and its shareholders in the future.