Denmark’s Orsted, the world’s biggest offshore wind developer, is cutting its 2030 investment program by 25 percent, the company said on Feb. 5, as the industry grapples with rising costs and supply chain issues.
Orsted develops, constructs, and operates offshore and onshore wind farms, solar farms, energy storage facilities, renewable hydrogen and green fuels facilities, and bioenergy plants.
The company said it is taking measures to shore up its finances in a challenging market.
It also said it sees no need to raise new cash, and that a revised plan will allow the group to keep cutting costs given it will construct at a slower pace than previously planned.
“We'll reduce our investment programme towards 2030 through a stricter, more value-focused approach to capital allocation,” Orsted CEO Rasmus Errboe said. “We do this to ensure a stronger balance sheet.”
The news comes just days after Orsted announced the departure of former CEO Mads Nipper.
Nipper, who had been in charge since 2021, came under pressure as losses mounted and the share price fell.
In January, data from the London Stock Exchange Group showed that the company’s market value had declined by about 83 percent from its 2021 peak.
“The impacts on our business of the increasingly challenging situation in the offshore wind industry ... mean that our focus has shifted,” Orsted Chair Lene Skole said in a statement at the time. “Therefore, the board has today agreed with Mads Nipper that it’s the right time for him to step down.”
Orsted said on Feb. 6 that most of its projects are progressing according to plan but warned it continues to face supply chain and construction challenges at its two U.S. offshore construction projects Revolution Wind and Sunrise Wind, both off the northeast coast.
“It would not be right for me to issue any guarantees in terms of further impairments,” Errboe said, referring specifically to the two U.S. projects.
‘Slow Car Crash’
Researcher Ben Pile, who runs the Climate Debate UK campaign group, told The Epoch Times that he believed the entire green energy agenda is “like a very slow car crash.”“All of its parts are on a collision course with reality,” he said via email.
Pile said that throughout Europe, governments have advanced “increasingly draconian climate and energy policies” in the belief that this would kickstart domestic industries.
“But even despite sky-high energy prices and huge subsidies, green energy developers simply cannot survive,” he said.
Pile said that the promises of green economic growth, green industries, and green jobs “have not delivered, and they are not going to be delivered.”
The Epoch Times reached out to Orsted but the company declined to comment.
Turver noted that the government has committed to a decarbonized grid by 2030.
“Pushing even more renewables on to the grid is bound to increase electricity costs even further, crushing our competitiveness,” he said.
