‍Orsted records $4 bln in impairments, ceases development of some U.S. offshore wind projects

Orsted said it anticipates 8 billion to 11 billion Danish crowns in the provision that accounts for potential contract cancellation fees not already covered by the impairments but excludes any potential reuse value of existing contracted equipment. In August, Orsted said it may see U.S. impariments of $2.3 billion due to supply chain problems, soaring interest rates and a lack of new tax credits.

Denmark's Orsted said on Wednesday it had recorded a 28.4 billion Danish crowns ($4.03 billion) impairment charge for the first nine months of 2023, and that it will cease work on its U.S. offshore wind projects Ocean Wind 1 and 2.

The world's largest offshore wind farm developer was still making a final investment decision on Revolution Wind, Orsted said in a statement. Development of the wind projects had been adversely affected by supply chain issues, increased interest rates and a lack of an OREC (offshore renewable energy certificate) adjustment on it's Sunrise Wind project, the company said.

Orsted said there would be a provision related to it ceasing the development of Ocean Wind 1, which would have negatively impact its fourth quarter 2023 earnings before interest, taxes, depreciation and amortization (EBITDA). Orsted said it anticipates 8 billion to 11 billion Danish crowns in the provision that accounts for potential contract cancellation fees not already covered by the impairments but excludes any potential reuse value of existing contracted equipment.

In August, Orsted said it may see U.S. impariments of $2.3 billion due to supply chain problems, soaring interest rates and a lack of new tax credits. ($1 = 7.0547 Danish crowns)