Britain Boosts Wind Farm Incentives Funding to $720 Million

The UK government has increased funding for wind farm incentives to $720 million. Orsted A/S, a leading Danish energy group, has reported a breakdown of its net sales by activity, including the development, construction, and operation of offshore wind farms, production and distribution of electricity, gas, and bioenergy, and the development of onshore wind and solar PV farms. The company's net sales are distributed geographically across various countries, with Denmark accounting for the largest share.

Danish renewables firm Orsted has announced it will shelve plans to build the massive Hornsea 4 wind farm off the UK coast due to rising costs and execution risks. The 2,400-megawatt project, which would have complemented existing wind farms, has been deemed unviable by the company.

The decision follows a series of adverse developments, including increased supply chain costs, higher interest rates, and logistical challenges. Orsted's CEO, Rasmus Errboe, stated that the project's value creation has been eroded by these factors [1]. The cancellation of the project will cost Orsted between 3.5 billion and 4.5 billion kroner ($533 million and $685 million).

Orsted maintains its long-term belief in the fundamentals of offshore wind in the UK. The company will retain the project rights and aim to develop it in a more value-creating manner for shareholders. The UK government has expressed its intention to work with Orsted to revive the project, citing the impact of global high inflation and supply chain constraints on the industry [2].

The cancellation of the Hornsea 4 project comes amidst broader challenges in the renewable sector. Orsted faced a $4 billion blow in 2023 when it cancelled wind farm projects in the United States, a crucial market for the group. The entire sector faces significant hurdles in the US following President Trump's freeze on federal permitting and loans for wind projects.

Orsted's financial performance in the first quarter of 2025 saw sales rise by eight percent to 20.7 billion kroner, despite falling short of analyst forecasts. The company's net profit nearly doubled to 4.8 billion kroner.

The UK government has recently increased funding for wind farm incentives to $720 million, aiming to support projects like Hornsea 4. Orsted's net sales are distributed geographically, with Denmark accounting for the largest share.

References:
[1] https://finance.yahoo.com/news/danish-firm-orsted-halts-huge-112403402.html
[2] https://transformers-magazine.com/tm-news/orsted-pulls-plug-on-major-uk-wind-farm/