Offshore wind developer Orsted trims investments, targets in major review

The company lowered its target for power generation capacity by the end of the decade to 35-38 gigawatt (GW) from 50 GW previously. It also said it would reduce capital expenditure in the coming three years by 35 billion Danish crowns ($5.05 billion).

Orsted, the world's No. 1 offshore wind farm developer, on Wednesday trimmed its investments and capacity targets and paused dividend payouts as part of a major review of its business. Once a green investor darling, the Danish company last year found itself at the centre of a perfect storm of rising inflation, higher interest rates and supply chain delays which forced several companies to cancel offshore projects in Britain and the United States.

Orsted halted development of two offshore wind projects in New Jersey in November and said related impairments had surged above $5 billion, more than halving the value of its shares. The company lowered its target for power generation capacity by the end of the decade to 35-38 gigawatt (GW) from 50 GW previously.

It also said it would reduce capital expenditure in the coming three years by 35 billion Danish crowns ($5.05 billion). The moves come less than a year after the company laid out ambitious plans to invest 475 billion Danish crowns to achieve its 2030 goal.

Orsted also said the firm will pause dividend payments for 2023-2025 and sell assets worth around 115 billion crowns towards 2030 to fund its reduced investment program. "We have prioritised projects within our portfolio and are implementing significant changes in our business, including revising our operating model to reduce risks," CEO Mads Nipper said in a statement.

Investors had expected the group to trim investment plans and cut dividends but had been worried that the Danish renewable energy firm would instead opt to raise new capital and stick to its ambitious targets. ($1 = 6.9278 Danish crowns)