Danish enterprise Ørsted suspends large-scale offshore wind farm undertaking in the UK.

Danish enterprise Ørsted suspends large-scale offshore wind farm undertaking in the UK.

💡 Danish wind giant Ørsted scraps plans for massive UK wind farm due to mounting troubles 💡

It's a setback for Britain's green energy ambitions as Danish renewables titan Ørsted announced on Wednesday it would axe its colossal Hornsea 4 wind farm project off the UK's coast, owing to escalating costs.

What's Happening?

The 2,400-megawatt Hornsea 4 project, which was slated to bolster two existing Ørsted offshore wind farms and another under construction, hit a series of snags. The major setbacks have spurred Ørsted to pull the plug on the project as it stands.

Here's a Lowdown on the Issues:

1. Costly Supply Chain: Soaring costs within the supply chain have boosted execution risks and diminished the project's anticipated value.
2. Interest Rates Skyrocket: Higher interest rates have worsened the financial obstacles, hampering the project's feasibility.
3. Construction and Operational Perils: Constructing and maintaining the project within the planned timeframe is fraught with risk.

The Outcome:

1. Project Termination: Ørsted will abandon the project in its current state following these adversities.
2. Retained Rights: Despite walking away from the project, Ørsted still holds the seabed rights, grid connection agreement, and Development Consent Order for Hornsea 4. The firm is mulling potential plans for future development on the site.
3. Significant Costs: Ørsted anticipates bearing substantial break-away costs ranging from DKK 3.5 billion to DKK 4.5 billion in 2025. The projected EBITDA impact falls between DKK 3.0 billion and DKK 3.5 billion.
4. Unaltered Guidance: Ørsted's full-year 2025 EBITDA guidance remains unchanged at DKK 25–28 billion, net of cancellation costs and new partnerships.

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1. The cancellation of the Hornsea 4 wind farm project by Ørsted is a blow to Britain's renewable energy industry and business, as it had the potential to significantly contribute to the country's green energy ambitions.
2. The project, which was planned to be a major addition to Ørsted's existing UK offshore wind farms, faced a series of problems, including escalating costs within the supply chain, higher interest rates, and operational challenges.
3. Due to these issues, Ørsted has decided to terminate the project, but they still hold the seabed rights, grid connection agreement, and Development Consent Order for potential future development.
4. The decision to scrap the project is expected to cost Ørsted between DKK 3.5 billion to DKK 4.5 billion in 2025, with an impact on EBITDA between DKK 3.0 billion and DKK 3.5 billion.
5. Despite the cancellation, Ørsted's full-year 2025 EBITDA guidance remains unchanged at DKK 25–28 billion, adjusting for cancellation costs and new partnerships.
6. Meanwhile, in other news, Maersk has managed to thrive despite the trade war, and Sweden and Denmark are dealing with a reduction in rail services during Easter week.
7. In more geopolitical news, Denmark is currently in negotiations with the US over alleged spying in Greenland and has the capability to end its defense agreement with Washington if the US were to leave NATO.

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