Ørsted Discontinues 2.4GW Hornsea 4 Offshore Wind Farm in UK
May 7, 2025
Ørsted has decided to discontinue the Hornsea 4 project in the U.K. in its current form, citing adverse developments like increase in supply chain costs, higher interest rates, and an increase in the risk to construct and operate the project on the planned timeline.
Ørsted has taken the decision to stop further spend on the 2,400 MW Hornsea 4 project at this time and terminate the project’s supply chain contracts, meaning that Ørsted will not deliver Hornsea 4 under the CfD awarded in AR6.
The company said it will evaluate options for future development of the Hornsea 4 project given the continuing seabed rights, grid connection agreement and Development Consent Order.
As a consequence of the decision, Ørsted expects to incur break-away costs of $470 million to $680 million (DKK 3.5 to 4.5 billion) in 2025.
The EBITDA impact is expected to be $455 million to $530 million (DKK 3.0 to 3.5 billion), this includes a write-down of the offshore transmission assets and a provision for contract cancellation fees (not part of guided EBITDA).
In addition, capitalized construction costs of approximately $76 million to $152 million (DKK 0.5 to 1.0 billion) will be written down (impact below EBITDA).
“Our capital allocation is based on a strict and value-focused approach, and after careful consideration, we’ve decided to discontinue the development of the Hornsea 4 project in its current form, well ahead of the planned Final Investment Decision later this year.
“We’ve been maturing the project over the past nine months and have been working relentlessly with stakeholders and suppliers to manage the different project risks for a project of this scale.
“Throughout the development phase we’ve been very diligent in our approach to capital commitment to our suppliers, and our committed capital is well below our threshold. The adverse macroeconomic developments, continued supply chain challenges, and increased execution, market and operational risks have eroded the value creation.”
“I’d like to emphasise that Ørsted continues to firmly believe in the long-term fundamentals of and value perspectives for offshore wind in the U.K. We’ll keep the project rights for the Hornsea 4 project in our development portfolio, and we’ll seek to develop the project later in a way that is more value-creating for us and our shareholders,” said Rasmus Errboe, Group President and CEO of Ørsted.
