From the Daily Caller
Irving Klinsky
Contributor
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.
Orsted estimates its asset value fell by $472 million in the first half of 2024, largely due to delays at onshore substations at its 704-MW Revolution Wind project off the coast of Rhode Island and Connecticut, the report showed. 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.
“Despite 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 delays. “This is certainly unsatisfactory and we remain committed to de-risking our portfolio.”
Revolution Wind's delays were caused by soil contamination at an onshore substation, resulting in an asset impairment of $310 million, or approximately 65% of the total impairment.
Orsted's share price fell 9% after the earnings report. according to Reuters.
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 would not meet its goal of 70% renewable energy generation by 2030.
A July report from the American Clean Energy Association showed that offshore wind capacity will be only 14 gigawatts by 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. (Related: 'A bunch of lawsuits trying to cover their tracks': Beach town locals slam offshore wind developers for polluting coast)
The Biden administration has provided billions of dollars in subsidies to the offshore wind industry, including Orsted.
“We remain highly focused on mitigating project execution risks and prioritizing growth options with the greatest value creation potential,” Nipper said of Orsted's first-half profit results.
Orsted and the White House did not immediately respond to requests for comment.
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