Ørsted is pushing ahead with two U.S. offshore wind projects amid potential policy threats but halting development of a much larger U.K. proposal due to rising costs.

The Danish renewable energy developer shared the news May 7 with the release of its latest financials. The company has struggled amid global headwinds facing renewables but managed to post higher first-quarter earnings in 2025 than in the same period of 2024.

Ørsted does expect halting the Hornsea 4 project to have a potential negative impact of as much as $530 million (U.S.) in the second quarter, however. And it projects a roughly $180 million impact on its Revolution Wind and Sunrise Wind projects due to new U.S. tariffs on steel and aluminum. Additional U.S. tariff impacts are possible but not expected to be as large.

Ørsted, which claims the title of largest offshore wind developer by capacity, surpassed 10 GW of installed offshore generation and reached 99% renewable generation in the first quarter of 2025.

During a conference call with financial analysts, CEO Rasmus Errboe reaffirmed the company’s commitment to offshore wind, saying “despite the significant challenges across certain geographies, the long-term fundamentals for offshore wind are strong.”

But the headwinds that emerged in the early 2020s still exist and led Ørsted to tighten its investment decision making process earlier this year.

Ørsted has suffered heavy losses on its investments in the struggling U.S. market, and the first question in the Q&A portion of the call honed right in on the latest threat: President Donald Trump.

How will Revolution and Sunrise be able to avoid stop-work orders like the one federal regulators in April slapped on Empire Wind 1, a New York project under construction by fellow Scandinavian developer Equinor?

Errboe said he would not speculate on the U.S. regulatory process.

The same analyst asked if Ørsted has discussed this risk with the Department of the Interior or its Bureau of Ocean Energy Management.

Ørsted always maintains an ongoing dialogue with regulators about its projects, Errboe said, but he described the current conversations only as “constructive.”

He told another analyst the company remains 100% committed to finishing both projects.

Revolution is far along in its offshore construction, with 100% of the export cable, 80% of monopiles and 50% of turbines installed. The delaying factor that has emerged is construction of the onshore substation. Revolution is not expected to reach commercial operation until the second half of 2026.

Offshore work began earlier this work on Sunrise, which is targeted for commercial operation in the second half of 2027.

Revolution will feed 704 MW into Connecticut and Rhode Island. Sunrise has a 924-MW offtake contract with New York.

Unlike some recent earnings calls, however, the U.S. market was not the main topic of discussion on May 7.

The decision to shelve Hornsea 4 — which at 2.4 GW would be one of the largest offshore wind arrays — overshadowed the other developments.

Errboe said increases in interest rates and supply chain costs as well as other adverse developments have raised risks and decreased anticipated rate of return well below the more-stringent thresholds for investment the company announced earlier this year.

Ørsted already has commissioned Hornsea 1 and 2 and now is building Hornsea 3. The problem that arose with Hornsea 4 is that cost factors changed after it was awarded its Contract for Difference — a mechanism by which the U.K. government subsidizes low-carbon generation.

A similar fate befell most early projects advanced by Ørsted and other developers off the Northeast U.S. coast, which locked in compensation long before costs.

Multiple contracts subsequently were canceled, and multiple proposed offshore wind projects were put on hiatus. Ørsted so far is the only developer to fully cancel a project — Ocean Wind 1 and 2, off the New Jersey coast.

Ironically, one of the ways Ørsted was going to reduce the financial blow of canceling Ocean Wind 1 was to use the export cables procured for that project instead on Hornsea 4.

Errboe emphasized that while the execution plan for Hornsea 4 is discarded, the concept of the wind farm itself is not.

The pause comes early enough that the financial impact is not as bad as it could be, he said, adding: “Also worth noting that we still have the lease rights, we still have the development consent order, we still have the grid connection agreement, and we will now work toward bringing the project forward again in a new configuration. We basically take it back to development, if you will.”

Ørsted reported a first-quarter 2025 EBITDA 18.7% higher than in the same period of 2024. Offshore wind earnings were 10% higher year over year, with weaker 2025 wind speeds offset by increased capacity and availability of generation.