Company Bails on Another Approved U.S. Offshore Wind Project

By B.N. Frank

Offshore wind projects are considered controversial and not just because dead whales and other marine life are washing up on beaches (see 1, 2, 3, 4, 5, 6, 7, 8).  While some still say that whales and other marine life are not being affected by development, the National Oceanic and Atmospheric Administration (NOAA) did confirm that they are – just not as badly as some people say they are.  Of course, economics and funding also play a role in development (see 1, 2, 3), hence companies continue to pull out of U.S. projects (see 1, 2, 3) including again recently in the state of Maryland.

From Wind-Watch.org:

Orsted withdraws from contract for Maryland offshore wind farm

Credit:  By Will Mathis and Josh Saul | January 25, 2024; Updated on January 26, 2024 at bloomberg.com ~~

Orsted A/S withdrew from an agreement with regulators in the US state of Maryland to sell electricity from a big offshore wind farm it’s planning to build in the Atlantic Ocean.

It’s the latest step for the Danish firm to reconfigure its portfolio of American projects after soaring costs forced it to take billions of dollars of write downs last year. Orsted’s executives plan to update investors on Feb. 7 on how they will reset the company after the setbacks.

The prices set in the power contract for the Skipjack Wind project were no longer viable because of inflation, high interest rates and supply-chain problems, the Danish company said late Thursday. Orsted will still move forward with the almost 1 gigawatt project. Shares rose as much as 1.6% in early Copenhagen trading on Friday before paring gains.

“Today’s announcement affirms our commitment to developing value creating projects and represents an opportunity to reposition Skipjack Wind,” David Hardy, head of Orsted’s Americas division said in a statement.

The nascent US offshore wind industry is struggling to adjust to higher costs, raising concerns about its future. Developers have been forced to recalculate the figures for proposals originally modeled years ago, with some delayed or even canceled.

Activist Post is Google-Free — We Need Your Support
Contribute Just $1 Per Month at Patreon or SubscribeStar

Last year, Orsted canceled two US offshore wind projects and recorded $4 billion in impairments.
The company didn’t announce any financial penalties for withdrawing from the deal in Maryland. It also didn’t cite any costs related to contracts with suppliers.

“We presume at this stage limited supply chain contracts would have been placed given its commercial operation date and potentially higher power prices in future contracts could limit any near-term write downs,” Jenny Ping, analyst at Citi said in an emailed note.

Out of 4.1 gigawatts of projects Orsted has in the US, 10% have reached a final investment decision, 35% are being rebid and 55% canceled, Citi’s Ping noted.

Source:  By Will Mathis and Josh Saul | January 25, 2024; Updated on January 26, 2024 at bloomberg.com

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

The copyright of this article resides with the author or publisher indicated. As part of its noncommercial educational effort to present the environmental, social, scientific, and economic issues of large-scale wind power development to a global audience seeking such information, National Wind Watch endeavors to observe “fair use” as provided for in section 107 of U.S. Copyright Law and similar “fair dealing” provisions of the copyright laws of other nations. Send requests to excerpt, general inquiries, and comments via e-mail.

Activist Post reports regularly about wind power and unsafe technologies.  For more information, visit our archives.

Image: Pixabay

Become a Patron!
Or support us at SubscribeStar
Donate cryptocurrency HERE

Subscribe to Activist Post for truth, peace, and freedom news. Follow us on SoMee, Telegram, HIVE, Minds, MeWe, Twitter – X, Gab, and What Really Happened.

Provide, Protect and Profit from what’s coming! Get a free issue of Counter Markets today.