Sign In or Create an Account.

By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy

Sparks

The World’s Biggest Offshore Wind Developer Had a Horrible 2023, and It’s America’s Fault

Orsted came out with some not-great earnings.

Wind turbines.
Heatmap Illustration/Getty Images

The Danish energy developer Orsted delivered a withering verdict on its experiment trying to build wind farms in the United States: Bad. It’s lost a ton of money, the company said Wednesday, so it’s going to do less of that going forward, and take on way less risk.

That Orsted had struggled in the U.S. offshore wind market was no secret — late last year, it cancelled two projects in New Jersey — but its earnings report put some grim figures on it.

The company said that it had 9.6 billion Danish kroner worth of fees (about $1.4 billion) related to one New Jersey project, Ocean Wind 1, and had booked $4 billion of losses, most of which were due to Ocean Wind 1’s cancellation. Overall, it reported a loss of almost $3 billion in 2023, entirely due to the fees and impairments it reported. Otherwise, the company would have had a more than $2 billion profit.

The company’s offshore wind misadventure won’t just weigh on its balance sheet or stock price. Investors, including the Danish government, will miss out on the company’s dividend for three years, through 2025. And the company’s chairman, Thomas Thune Andersen, said he would step down next month.

All this also meant that the company expects to have far less installed renewable capacity developed by the end of the decade than it had previously targeted, down to 35 to 28 gigawatts from the 50 GW it had projected as recently as last year. (It has just under 16 GW at the moment.) The company will cut its planned investment by more than half, according to Morningstar analyst Tancrede Fulop.

Orsted and other wind developers have blamed a combination of supply chain issues, high interest rates, and inflexibility in the contracts signed with state governments for the failures, delays, and cancellations of projects up and down the East Coast last year. In New York, Orsted and other developers failed to get their contracts adjusted to account for higher costs, and so were forced to cancel and, in some cases, re-bid.

The company said in a presentation to investors that it was “now focused predominantly on the Northeast,” essentially throwing in the towel on anywhere south of New York, having withdrawn from the New Jersey project and declaring that its Maryland project, Skipjack, will continue development “with minimal spend.”

The trouble wasn’t just in the United States, though — Orsted also said it was pulling out of Norway, Spain, and Portugal, while it was “deprioritising development in other markets including Japan.” It does, however, seem committed to maintaining some presence here, having submitted a new bid for Sunrise Wind, a planned wind farm off the east coast of Long Island.

In a call with analysts, the company’s chief executive Mads Nipper said that Orsted will spend far less money on projects before making the final approval to go forward with construction. The company also said that it will “pursue offtake opportunities where attractive with low pre-FID commitments and inflation protection” — in other words, bid for projects with low upfront costs and someone else around to absorb rising costs.

Blue

You’re out of free articles.

Subscribe today to experience Heatmap’s expert analysis 
of climate change, clean energy, and sustainability.
To continue reading
Create a free account or sign in to unlock more free articles.
or
Please enter an email address
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Sparks

Georgia Just Released Eye-Popping New Energy Demand Estimates

We’ll give you one guess as to what’s behind the huge spike.

A data center.
Heatmap Illustration/Getty Images

Georgia is going to need a lot more electricity than it once thought. Again.

In a filing last week with the state’s utility regulator, Georgia Power disclosed that its projected load growth for the next decade from “economic development projects” has gone up by over 12,000 megawatts, to 36,500 megawatts. Just for 2028 to 2029, the pipeline has more than tripled, from 6,000 megawatts to 19,990 megawatts, destined for so-called “large load” projects like new data centers and factories.

Keep reading...Show less
Yellow
Sparks

Will Trump Take Down Biden’s IRA Billboards?

The signs marking projects funded by the current president’s infrastructure programs are all over the country.

Donald Trump taking down an IRA sign.
Heatmap Illustration/Getty Images

Maybe you’ve seen them, the white or deep cerulean signs, often backdropped by an empty lot, roadblock, or excavation. The text on them reads PROJECT FUNDED BY President Joe Biden’s Infrastructure Law, or maybe President Joe Biden’s Inflation Reduction Act, President Joe Biden’s CHIPS and Science Act, or President Joe Biden’s American Rescue Plan. They identify Superfund cleanup sites in Montana, road repairs in Acadia National Park in Maine, bridge replacements in Wisconsin, and almost anything else that received a cut of the $1.5 trillion from the American Rescue Plan Act of 2021.

Officially, the signs exist to “advance the goals of accountability and transparency of Federal spending,” although unofficially, they were likely part of a push by the administration to promote Bidenomics, an effort that began in 2023. The signs follow strict design rules (that deep cerulean is specifically hex code #164484) and prescribed wording (Cincinnati officials got dinged for breaking the rules to add Kamala Harris’ name to signs ahead of the election), although whether to post them is technically at the discretion of local partners. But all federal agencies — including the Environmental Protection Agency and the Federal Transit Authority, which of each received millions in funding — were ordered by the Office of Management and Budget to post the signs “in an easily visible location that can be directly linked to the work taking place and must be maintained in good condition throughout the construction period.”

Keep reading...Show less
Blue
Sparks

Elon Musk Is Getting What He Wants

It’s official: Trump is out to kill the EV tax credit.

Donald Trump.
Heatmap Illustration/Getty Images

The Trump administration is hoping to kill the $7,500 tax credit for electric vehicle buyers, according to a Reuters report citing two anonymous sources within the Trump transition team.

That aspiration isn’t totally unexpected — President-elect Donald Trump flirted with ending the EV tax credit throughout the campaign. But it’s nonetheless our first post-election sense of how the Trump administration plans to pursue the Republican tax package that is expected to be the centerpiece of its legislating agenda.

Keep reading...Show less