Ørsted to run leaner after US offshore wind losses

Ørsted’s Board of Directors has completed a portfolio review after the energy company suffered a challenging 2023, especially in the US offshore wind market.

In a company statement, Ørsted said its "US offshore projects caused significant impairments and additional costs for terminating contracts, leading to a negative impact on credit metric projections".

In order to protect growth prospects, Ørsted has announced various measures to support capital structure resilience and reduce risk.

Mads Nipper, Group President and CEO of Ørsted, commented: “We have prioritised projects within our portfolio and are implementing significant changes in our business, including revising our operating model to reduce risks.”

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As part of the plan, Ørsted intends to:

• Exit several offshore markets (including Norway, Spain, and Portugal), deprioritising development activities in Japan, and planning for a leaner development within floating offshore wind and P2X.
• Speed up its divestment programme, expecting DKK 115 billion ($16.6 billion) in proceeds towards 2030 from divestments.
• Prioritise growth options with the highest potential for value creation and lower risks.
• Focus on contingency planning, monitoring of suppliers, inflation protection, scrutiny of pre-FID commitments, greater flexibility on project timelines and commissioning dates, as well as project governance and reviews.
• Reduce capital expenditure and pause dividends for the financial years 2023-2025.
• Operate leaner by reducing its fixed costs leading to a reduction in 600-800 positions globally, resulting in 250 redundencies in the coming months.

The business plan will also result in lowered ambitions for installed renewable capacity by 2030, from 50GW to a maximum of 38GW.