The Danish renewable energy group posted a huge impairment loss on Thursday in its first-half 2024 results after postponing the launch of one of its US offshore wind projects.
Orsted estimates that asset values will decline by $472 million in the first half of 2024, driven primarily by delays to the onshore substation for its 704-megawatt (MW) “Revolution Wind” project off the coast of Rhode Island and Connecticut, the report said. ShowedThe company also reported a range of problems, including losses related to the cancellation of the Ocean Wind project in New Jersey and the abandonment of plans to produce environmentally friendly methanol in Sweden.
“While the Revolution Wind offshore wind project in the US remains on track, construction of the project's onshore substation has been delayed,” Orsted CEO Mads Nipper said of the delay. “This is of course frustrating and we remain committed to de-risking our portfolio.”
“Offshore wind turbines are completely unreliable, would increase utility bills and be devastating to coastal communities.” https://t.co/pnOFP4NpHx
— Save Jersey (@SaveJersey) August 15, 2024
The delays at Revolution Wind were caused by soil contamination at an onshore substation, which caused the asset's value to fall by $310 million, or about 65% of the total impairment.
Orsted's shares fell as much as 9% after the results were released. According to To Reuters.
The U.S. offshore wind industry has seen a string of project delays, missed production targets and public backlash over the past year.
New York state canceled three offshore wind projects in April after failing to reach power purchase agreements with developers. The failure prompted New York's Democratic governor, Kathy Hawkle, to issue a formal review in July, acknowledging that the state's goal of reaching 70% renewable electricity by 2030 would be unattainable.
July Report According to a study by the American Clean Power Council, only 14 gigawatts of offshore wind capacity will be installed by 2030, less than half of what the Biden administration plans. target.
The industry also came under fire in July after a wind turbine malfunctioned off the coast of Nantucket, scattering debris into the ocean and forcing the closure of several beaches. (Related: “Men in suits trying to cover their tracks”: Coastal town residents accuse offshore wind developers of polluting beaches)
The Biden administration has committed billions of dollars to Subsidies to the offshore wind industry, including Orsted.
Commenting on Ørsted's first-half results, Nipper said: “We remain focused on de-risking project delivery and prioritising growth options with the highest potential for value creation.”
Orsted and the White House did not immediately respond to requests for comment.
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