Ørsted slashes offshore wind spending by 25%

Presenting its annual report for 2024 today, new CEO Rasmus Errboe – who replaced Mads Nipper last week – said the committee was fully committed to offshore wind, and was ‘closely following’ developments in the US, where it has two offshore wind farms that already have permits – Sunrise and Revolution.

“We are reviewing the Executive Order on Wind Energy (signed by Donald Trump on his first day in office) and awaiting the Cabinet secretary to take office, which is happening as we speak,” Errboe said.

“You need to differentiate between assets under construction and the future. With Sunrise and Revolution – we are fully committed to moving them forward and delivering them, so the Executive Order shouldn’t have any implications as they are under construction. We don’t know about those under development.”

Challenges and focus

In its annual report, the company says the industry ‘has been characterised by continued and more challenging headwinds relating to regulatory, supply chain and macroeconomic developments’.

“Together with project-specific challenges related to our US offshore wind projects under construction, this has had an adverse impact on our capital structure.

“Faced by this reality, we are updating our business plan to be more focused and to support our target of a solid investment grade rating. As part of this, we are stepping away from our 2030GW ambition and EBITDA target, and we are reducing our investment programme.”

The company says it will continue to be active across three regions (Europe, US and Asia presumably), but will focus on capital allocation.

“Thus, when we pursue new development opportunities, we will first and foremost prioritise the most financially attractive countries where we see the most attractive framework conditions and investment environment,” it said, without specifying.

“With the reduced growth ambition towards 2030 and a disciplined approach to capital allocation, Ørsted will inevitably become a more lean and focused company. Therefore, we will take measures, beyond the 2024 initiatives, to continuously adapt and rightsize our cost base and organisation to fit our value and build-out ambition.”

When asked if he would have done anything differently from previous CEO Mads Nipper, Errboe said: “We are different people with different backgrounds, but we share a passion for the green transition.”