Wind Energy – Hornsea 4
Ørsted has today decided to discontinue the Hornsea 4 project in the UK in its current form.
Since the Contract for Difference (CfD) award in allocation round 6 (AR6) in September 2024, the 2,400 MW Hornsea 4 project has seen several adverse developments relating to continued increase of supply chain costs, higher interest rates, and an increase in the risk to construct and operate Hornsea 4 on the planned timeline for a project of this scale.
In combination, these developments have increased the execution risk and deteriorated the value creation of the project. Therefore, Ørsted has decided to stop further spending on the project at this time and terminate the project’s supply chain contracts, meaning that Ørsted will not deliver Hornsea 4 under the CfD awarded in AR6.
Ørsted will evaluate options for future development of the Hornsea 4 project given the continuing seabed rights, grid connection agreement and Development Consent Order.
As a consequence of the decision, Ørsted expects to incur breakaway costs of DKK 3.5 to 4.5 billion in 2025. The EBITDA impact is anticipated to be DKK 3.0 to 3.5 billion, which includes a write-down of the offshore transmission assets and a provision for contract cancellation fees (not part of guided EBITDA).
Additionally, capitalized construction costs of approximately DKK 0.5 to 1.0 billion will be written down (impact below EBITDA).
