Orsted warns of earnings hit after axing U.K. offshore wind project

illuminem summarises for you the essential news of the day. Read the full piece on The Wall Street Journal or enjoy below:

🗞️ Driving the news: Orsted announced it will discontinue its Hornsea 4 offshore wind project in the U.K., citing rising supply-chain costs and higher interest rates
• The cancellation is expected to reduce 2025 earnings before interest, taxes, depreciation, and amortization (EBITDA) by between 3 billion and 3.5 billion Danish kroner ($457–$533 million)

🔭 The context: Hornsea 4 was intended to be one of the world’s largest offshore wind projects, further cementing Orsted’s leadership in the sector
• However, the global offshore wind industry has faced mounting challenges over the past year, including inflation, supply-chain disruptions, and surging financing costs
• Despite the setback, Orsted (see sustainability performance) reaffirmed its full-year EBITDA guidance, signaling confidence in its broader portfolio performance

🌍 Why it matters for the planet: Offshore wind is a cornerstone of global efforts to transition to clean energy and meet net-zero targets
• Project cancellations like Hornsea 4 highlight the growing economic risks facing renewable infrastructure, threatening momentum at a critical time for climate action
• It underscores the need for policy adjustments, financial innovation, and stronger supply chains to stabilize the renewable sector's growth

⏭️ What's next: Orsted will now focus on other projects within its portfolio, while policymakers and investors are likely to scrutinize offshore wind financing structures more closely
• The setback may also prompt broader calls for regulatory reforms to support renewable developers against macroeconomic pressures
• Watch for updated guidance in Orsted’s mid-year earnings and potential impacts on upcoming offshore wind auctions

💬 One quote: "Rising supply-chain costs and higher interest rates were among the adverse developments that prompted [Orsted's] decision," the company stated

📈 One stat: Orsted expects the project halt to cost between 3.5 billion and 4.5 billion Danish kroner ($533–$686 million), significantly impacting its 2025 earnings

See on illuminem's Data Hub™ the sustainability performance of Orsted and its peers, including Iberdrola, and Vestas

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