- Orsted has cancelled Britain’s Hornsea 4 offshore wind project, citing rising costs, supply chain issues, higher interest rates, and execution risks.
- The cancellation affects the UK’s 2030 clean energy goals, though the government remains committed to working with Orsted to revive the project.
Orsted announced on Wednesday, May 7, that it would no longer build the Hornsea 4 offshore wind farm in Britain. The company blamed renewables for a deteriorating global business environment. The decision marks a setback for the UK’s decarbonisation goals.
The Danish energy firm has lost about 80% of its market value since its peak in 2021, as project costs climbed, supply chains faltered, and investor confidence waned partly due to U.S. President Donald Trump’s opposition to offshore wind.
Orsted estimated that cancelling Hornsea 4, one of the world’s largest offshore wind farms, would cost up to 5.5 billion Danish crowns ($837.85 million) in breakaway fees and write-downs. The company said the project no longer offered sufficient value.
“Increased supply chain costs, higher interest rates, and heightened execution risks have eroded the project’s value,” said Chief Executive Rasmus Errboe, who took the helm in January. He now faces rebuilding investor trust while reshaping the company to reflect the offshore wind sector’s shifting dynamics.
“We made this decision to ensure we only advance assets that deliver the value we seek,” Errboe told reporters. Orsted had not yet made a final investment decision on Hornsea 4.
Britain’s Energy Secretary Ed Miliband expressed hope the plans could be revived. “We remain committed to working with Orsted to try to make Hornsea 4 happen by 2030,” he said during a visit to Norway. The UK aims to develop 50 gigawatts of clean energy capacity by the end of the decade.
Analysts reacted swiftly. Bernstein described the move as evidence of “stronger discipline” under Orsted’s new leadership, while Barclays called the cancellation an “eye-opener”.
Despite the setback, Britain—home to the world’s largest offshore wind market outside China—continues to pursue ambitious decarbonisation efforts. Orsted secured a 2.4-gigawatt contract for Hornsea 4 in a UK renewables auction last September, designed to enhance project security.
“We believe the UK government is providing the right framework,” Errboe said. However, the industry grapples with rising costs, supply chain bottlenecks, interest rate hikes, and growing trade tensions.
Orsted reported that U.S. tariffs on steel, aluminium, and related goods had driven up costs for two offshore projects in the United States, resulting in a 1.2 billion crown impairment. Despite this, construction on those projects will continue.
For the first quarter, Orsted posted a profit before interest, tax, depreciation, and amortisation of 8.6 billion Danish crowns, excluding new partnerships and cancellation fees, beating analyst expectations of 7.88 billion. The company maintained its 2025 financial outlook, excluding Hornsea 4-related costs.