A Danish renewable energy group booked a huge impairment loss on Thursday after delaying the launch of its U.S. offshore wind plans, according to its first-half 2024 earnings report. [emphasis, links added]
Orsted estimates that the value of its assets fell by $472 million in the first half of 2024, Mainly due to delays at onshore substations for the 704-megawatt (MW) Revolutionary Wind project off the coast of Rhode Island and Connecticutthe report shows.
The company also reported a variety of other issues, including losses related to the cancellation of the New Jersey Ocean Winds project and the abandonment of efforts to produce environmentally friendly methanol in Sweden.
“While we have made encouraging progress on our U.S. offshore wind project, Revolution Wind, Construction of the project's onshore substation has been delayed,” Orsted CEO Mads Nipper said of the delay. “This is certainly unsatisfactory and we remain committed to de-risking our portfolio.”
Revolution Wind delays caused by soil contamination at onshore substation This resulted in an asset impairment of US$310 million, accounting for approximately 65% of the total impairment.
According to Reuters, Orsted's share price fell 9% after the earnings report was released.
Last year, the U.S. offshore wind industry saw a wave of project delays, missed production targets and public backlash.
New York state canceled three offshore wind projects in April after failing to finalize power purchase agreements with developers.
Those failed efforts prompted Democratic New York Gov. Kathy Hochul to issue a formal review in July Acknowledging that the state will not meet its goal of 70% renewable electricity by 2030.
A July report from the American Clean Energy Association found that Only 14 GW of offshore wind power capacity will be deployed in 2030. Less than half of the Biden administration’s goal.
The industry also came under criticism in July after a damaged wind turbine scattered debris into the ocean and closed several beaches off the coast of Nantucket.
The Biden administration has provided billions of dollars in subsidies to the offshore wind industry, including Orsted.
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