Orsted Halts Ambitious UK Wind Initiative Amid Deteriorating Economic Conditions

COPENHAGEN, May 7 (Reuters) – Orsted has decided to scrap plans for a important offshore wind project in the UK, citing challenges in the global renewable energy market. This move is a setback for Britain’s efforts to transition to cleaner energy sources. The Danish firm has seen its market value plummet by about 80% since its peak in 2021 due to rising costs and supply chain issues,compounded by political factors like former U.S. President Donald Trump’s stance against offshore wind initiatives.The cancellation of Hornsea 4, which was set to be one of the largest offshore wind farms globally, will cost Orsted up to 5.5 billion Danish crowns (approximately $838 million) in penalties and asset write-downs. CEO Rasmus Errboe explained that escalating supply chain expenses and higher interest rates have diminished the project’s anticipated value.

Errboe took over as CEO earlier this year and now faces the task of restoring investor trust while adapting Orsted’s strategy to align wiht current industry realities. “We had to make this tough call so we can focus on projects that promise real returns,” he shared with reporters.While no final investment decision had been made regarding Hornsea 4 yet, Britain’s Energy Secretary ed Miliband expressed hope for reviving the initiative by 2030 during his visit to Norway. He emphasized that despite this setback, Britain remains committed to achieving its goal of generating 50 gigawatts of clean power capacity within the same timeframe.

Orsted’s shares saw a slight uptick of 0.7% following this proclamation but have dropped nearly a third since Trump was re-elected last November. Analysts from Bernstein noted that while unexpected, this cancellation reflects stronger management discipline under Errboe’s leadership; Barclays described it as an eye-opener for investors.

Despite Trump’s support for fossil fuels,Britain continues pushing forward as a leader in offshore wind energy—second only to China—and aims at decarbonizing its electricity grid amid global warming concerns.

Last September,Orsted secured a contract worth 2.4 gigawatts for Hornsea 4 during a UK renewables auction designed to bolster project security—a sign that there is still potential within Britain’s renewable landscape despite recent hurdles.

Errboe acknowledged ongoing struggles within the industry due largely to rising costs and trade tensions affecting supply chains: “The UK goverment is doing well with their framework,” he stated confidently about future prospects.

In addition, U.S.-imposed tariffs on steel and aluminum have raised expenses related specifically to two offshore projects stateside; however,construction will proceed despite these financial hits amounting up to an impairment charge of around 1.2 billion crowns reported recently by Orsted.

For Q1 earnings before interest and taxes—excluding new partnerships or cancellation fees—the company reported profits reaching approximately 8.6 billion danish crowns against analyst expectations averaging around 7.88 billion crowns according to internal polling data.

Orsted maintained its outlook through until at least mid-2025 but did not factor in losses from Hornsea’s cancellation into their projections moving forward.
($1 = 6.5644 Danish crowns)

(Reporting by Stine Jacobsen Louise Breusch Rasmussen in Copenhagen and Nora Buli in Oslo; editing by Terje Solsvik and Barbara Lewis)

(c) Copyright Thomson Reuters 2025

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