Despite reporting better-than-expected earnings for the first quarter, Ørsted, the world’s largest offshore wind developer, cautioned that the offshore wind sector faces growing short-term challenges.
In its Q1 results released Wednesday, the Danish energy giant said the industry is under pressure from supply chain issues, regulatory uncertainty, and broader economic conditions. “The offshore wind industry is challenged in the short term with headwinds relating to supply chain, regulatory, and macroeconomic developments,” Ørsted said.
Core earnings—measured as EBITDA excluding new partnerships and cancellation fees—rose 14% year-on-year to $1.31 billion (8.6 billion Danish crowns), topping the company’s own forecast of $1.21 billion (8 billion crowns).
Ørsted reaffirmed its full-year earnings and investment outlook for 2025. However, it warned that rising costs, tighter financing conditions, and growing risks have made the near-term business climate more difficult.
As a result, Ørsted has scrapped its Hornsea 4 offshore wind project in the UK in its current form. The decision comes ahead of a planned final investment call later this year. “The combination of increased supply chain costs, higher interest rates, and increased execution risk have deteriorated the expected value creation of the project,” said Rasmus Errboe, Group President and CEO of Ørsted.
He added that ongoing macroeconomic and market pressures are weighing on project profitability, despite the company’s long-term confidence in offshore wind.
The challenges facing Ørsted are part of broader industry setbacks. In the U.S., the Department of the Interior recently halted construction of Equinor’s Empire Wind project off New York. The agency cited concerns that the previous administration may have approved the project without a proper environmental review.
Equinor has pushed back against the decision. CEO Anders Opedal said the company believes the halt is “unprecedented and unlawful.” He added, “We have invested in Empire Wind after obtaining all necessary approvals.”
While Ørsted and other major players remain committed to offshore wind in the long term, recent events highlight growing tensions between ambitious clean energy goals and the complex realities of delivering large-scale projects under uncertain conditions.
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