Ørsted has run into new delays that will push back completion of at least one of the two offshore wind farms it’s building in U.S. waters. 

The world’s largest offshore wind developer said Aug. 15 that complications with the onshore substation for its Revolution Wind will push completion of the project from 2025 to 2026, and the complexity of building the first offshore HVDC system in the United States may push completion of Sunrise Wind from late 2026 to the first half of 2027. 

As it released its first-half 2024 financial report, the company said it will record new impairments due to the Revolution Wind delay and its decision to suspend FlagshipONE, the e-methanol ship fuel production facility it was building in Sweden. Its stock price closed 7.2% lower. 

The announcement was the latest setback for Ørsted in its U.S. offshore wind development portfolio. It booked billions in impairments in 2023 as it canceled Ocean Wind in New Jersey, canceled the offtake contract in Maryland for Skipjack Wind and declared that Sunrise Wind was untenable under terms of its contract with New York. (See Ørsted Cancels Ocean Wind, Suspends Skipjack, Ørsted Cancels Skipjack Wind Agreement with Maryland, NY Rejects Inflation Adjustment for Renewable Projects.) 

Amid all that, Ørsted and its partner Eversource decided in October to move forward with Revolution Wind, a 704-MW wind farm that will feed into the grid in Connecticut and Rhode Island, having determined they could work around supply chain constraints and vessel availability issues that slowed or halted other Northeast projects. 

And in fact, Ørsted CEO Mads Nipper said Aug. 15, offshore construction of Revolution is going well — 44 of 67 foundations are in place and turbine installation will start in the coming weeks. 

The chokepoint now is onshore — a toxic legacy of the past rather than growing pains for the clean energy of the future. 

The substation is to be built on a former U.S. Navy disposal site in Quonset Point, R.I., that turns out to be more heavily contaminated than previously thought. The mitigation requirements therefore are greater than initially projected. 

The situation is unsatisfactory but will not deter Ørsted from its long-term goals, Nipper said. 

Eversource, which also has incurred heavy losses in the offshore wind space, has sold its 50% share of Sunrise to Ørsted and is selling its 50% share of Revolution to GIP. (See Eversource Finds OSW Buyer, Takes $1.95B Hit for 2023.) But it will remain involved with the onshore portions of the projects, including the Revolution substation. 

Meanwhile, the financially untenable Sunrise contract has been replaced with a deal with New York state that carries much higher compensation to reflect the sharply higher costs of building the 924-MW offshore wind farm. (See Sunrise Wind, Empire Wind Tapped for New OSW Contracts.) 

When federal regulators approved the construction and operations plan for Sunrise on June 21, Ørsted said it would start offshore construction this year and that it expected to be done in 2026. (See Sunrise Wind Cleared to Begin Construction.) Onshore construction has been under way for months and officially broke ground in July. 

On Aug. 15, Ørsted said it would start offshore installation in 2025 and that the commissioning date could slip from the end of 2026 into the first half of 2027, due to the pioneering nature of its use of HVDC cable. 

Ørsted reported an impairment equal to $310 million on the Revolution delay but said the potential Sunrise delay is incorporated into planning and would not result in an impairment. In fact, Ørsted reversed $256 million of previous impairments due to Sunrise securing the new contract with New York. 

In a conference call Aug. 15 with financial analysts, Nipper said, “In the offshore business, no project is without challenges and risk. There is no reason with the current knowledge to believe that what we have now is not realistic. It would be speculation to say, ‘What else could go wrong?’ because what we present to you now is a plan that we believe in.” 

He also gave an update on other aspects of Ørsted’s offshore wind business: 

• • It took an $88 million impairment on the diminished value of the seabed lease areas off the New Jersey coast it once targeted for Ocean Wind. 

• • Repurposing the export cable that would have been installed at Ocean Wind for the Hornsea project off the English coast would be financially beneficial, and Ørsted is progressing with plans to do so. 

• • The company has no plans to use Chinese-made wind turbines but does not rule them out; it would consider any product that met specifications and standards. 

• • The Skipjack concept remains in active development — a revised construction and operations plan recently was submitted to federal regulators — but there is no specific plan yet for moving toward construction. 

• • Ørsted has been able to firm up its supply agreements for monopile foundations, one of the more significant pinch points in the supply chain, and it has secured the services of installation vessels, which are in critically short supply. 

• • It has scrutinized other planned substation sites, including for Sunrise, and has not found issues comparable to the problems facing the Revolution site. (Nipper said in November 2023 there was contamination at both the Sunrise and Revolution cable landing sites, enough that both would qualify as brownfields eligible for enhanced investment tax credits.)