Orsted Halts UK Wind Farm Amid Industry Challenges
Danish energy firm Orsted has halted plans to build Hornsea 4, a major UK offshore wind farm, due to rising costs and supply chain disruptions. The unexpected cancellation underscores mounting challenges in the renewable energy sector, with supply costs and investor confidence at stake.
Orsted, the Danish energy company, announced on Wednesday that it will no longer pursue the development of the Hornsea 4 offshore wind farm in the UK. The decision comes amid a challenging global business environment for renewables, significantly impacting UK's renewable energy aspirations.
The cancellation of Hornsea 4 is seen as a response to increased supply chain costs, higher interest rates, and overall heightened execution risks, which have undermined the expected value of the project. The decision will incur costs of up to 5.5 billion Danish crowns for Orsted, including breakaway fees and write-downs.
The situation places new CEO Rasmus Errboe in the difficult position of restoring investor confidence and optimizing the company's operations to align with current industry realities. Despite the setback, the UK remains committed to its renewable goals, aiming for 50 gigawatts of clean power capacity by 2030.
(With inputs from agencies.)
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