Ørsted abandons Hornsea 4 because of excessive supply costs

Denmark's leading energy supplier and offshore wind power giant Ørsted is abandoning the further development of the 2.4 gigawatt (GW) Hornsea 4 offshore wind farm project. After already receiving a contract for difference in tender round 6 in September 2024, the Danish company indicated that rising costs in the supply chains, increasing interest expenses and higher construction and delivery risks had run counter to the project.

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Ørsted intends to terminate the contracts already concluded with suppliers in the supply chain and will not deliver the project and the electricity to be produced at the planned wind farm in accordance with the contract for difference. The company will now examine options for future development of Hornsea 4, while the sea rights, the agreement on grid connection, and the development commitment remain in place. The company now expects demolition costs of the equivalent of less than €500 million to €600 million.

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Adverse macroeconomic developments, ongoing supply chain challenges, and increased execution, market, and operational risks have eroded value creation,” said CEO Rasmus Errboe, the Ørsted boss.

The company has already developed and built the first two Hornsea sections, with a good 1.2 GW and almost 1.4 GW, and has begun construction of Hornsea 3. The wind farm project in the third Hornsea seafield is currently scheduled to go online by 2027 and will create the largest section with 2.85 GW of generation capacity. Construction work onshore is in full swing, and the first offshore substation has been shipped to Europe following its manufacture in Asia.