Losses of 2.7 billion Euros and a failed major project in the USA have plunged the Danish wind power group Ørsted into a serious crisis. The news that offshore projects in the USA have to be cancelled due to increased costs and supply problems caused the company's share price to crash by a quarter. However, not only the shareholders are shaken by this ignoble incident, but also the White House under US President Joe Biden has been called into action.
The loss of the leading wind project developer is a major setback for the ambitious expansion goals of the US in the offshore wind industry. The planned projects named Ocean Wind 1 and 2 have to be abandoned, resulting in write-offs for Ørsted of up to 3.8 billion Euros. Additionally, potential compensation payments of 1-1.5 billion Euros are expected, which have not yet been accounted for in the previous write-offs.
The company is still trying to maintain the value of the projects, even though development has ceased. However, company CEO Mads Nipper emphasised that the US continues to rely on offshore wind energy in order to meet its CO₂ emission goals. The Danes remain loyal to the US renewable energy market.
Ørsted is not the only company in the industry suffering from supply problems and rising costs. Other industry companies, such as wind turbine manufacturer Vestas and the Spanish subsidiary Siemens Gamesa, are also grappling with losses. The situation clearly shows that the problems in the wind power industry can endanger not only individual companies, but also the ambitious climate goals set by the EU and other countries.
Ørsted's Failure is Also a Severe Blow to Ambitious Plans from U.S. President Biden. His goal is to achieve 30 Gigawatts of offshore wind capacity by 2030, but currently only facilities totaling 41 Megawatts are installed in the U.S. In comparison, Germany already has 8.5 Gigawatts of offshore wind capacity and plans to reach 30 Gigawatts by 2030. Despite the cancellation of projects, the White House reinforced its will to advance the offshore wind industry, citing "macroeconomic challenges."
The US offshore wind projects also have financial consequences for other companies. The oil giant BP wrote off $540 million for wind projects in the third quarter after the state of New York rejected a change in conditions. Norwegian company Equinor, a partner of BP, recorded a depreciation of $300 million for the projects. The crisis is thus not only limited to the US, but also has effects on other parts of the world.
