Orsted, a Danish wind power developer, declared a $4 billion write-down in the initial nine months of the year, and announced the annulment of two proposed off-shore wind strategies off the coast of New Jersey. Their Ocean Wind 1 undertaking would have been the first such offshore wind farm in New Jersey, and would have been capable of supplying enough electricity to support 500,000 households starting in 2025. The second one, of a similar size, was anticipated to be finished a few years later. CEO Mads Nipper declared that "counteractive progressions from supply chain struggles, causing delays in the project timetable, and increasing loan fees," had prompted the ventures' cancelations.
This week, Orsted announced the cancellation of two off-shore wind projects planned off the coast of New Jersey, along with a $4 billion impairment for the first nine months of the year. An additional provision of up to $1.55 billion has been set aside to cover potential contract cancellation fees, increasing the total write-off to a potential $5.55 billion.CEO Mads Nipper stated that "supply chain challenges, leading to delays in the project schedule, and rising interest rates" were the cause of the cancelations, according to a statement from the company published Tuesday. The $2.8 billion of the impairment is attributable to the Ocean Wind 1 project, which would have been New Jersey's first offshore wind farm and would have been capable of supplying energy to half a million homes. It was set to be comprised of 98 turbines at a distance of 15 miles from the coast, with construction beginning this fall and power generation beginning in 2025. Ocean Wind 2, which was to operate in 2028, was similar in size and scope.
Nipper expressed his deep disappointment in a written statement published alongside the announcement, announcing the company's decision to end its development of Ocean Wind 1 and 2. Notwithstanding this, Nipper restated his firm conviction that the US needs offshore wind to reach its carbon emissions reduction commitment, and expressed his admiration for the US government's attempts to facilitate the development of the country's offshore wind business. Orsted's Revolution Wind project is moving forward and is a cooperative venture with Eversource, situated more than 32 miles off the Connecticut coast. In addition, Orsted is overseeing other projects in Maryland, New York and Rhode Island. Despite informing investors of potential financial losses prior, Orsted recently amplified their estimates to up to $2.3 billion on their US investments back in August. Subsequently, further unfavourable developments have come to light. Orsted's headquarters are located in Denmark, where it currently employs 8,700 people, and had a revenue of $18.7 billion in 2022.
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