The world’s leading offshore wind developer charted a path forward from the industry’s recent turmoil as it released its first-quarter financial results May 2. 

In a conference call with financial analysts, Ørsted CEO Mads Nipper said the company is confident the plan is coming together for the successful construction of Revolution Wind and Sunrise Wind off the Northeast U.S. coast. 

He outlined steps taken to prevent a repeat of the series of setbacks that cost Ørsted billions of Danish kroner in 2023 as it tried to navigate the U.S. offshore wind market’s growing pains. 

The company said its financials for the first three months of 2024 were in line with expectations, with offshore earnings 18% higher than in the same quarter in 2023. The company’s stock closed 2.7% higher May 2, a marked contrast to the plunges that followed some of the company’s 2023 announcements. 

Nipper and CFO Trond Westlie laid out some first-quarter highlights for Ørsted: 

• • The company secured a provisional contract with New York for Sunrise Wind to replace a previous deal that did not cover rising construction costs; this allowed the company to reverse some of the impairments it previously assigned to that project. 
  • Federal regulators green-lighted construction of the 924-MW Sunrise. (See BOEM Approves NY’s Sunrise Wind OSW Project.) 
  • The company is moving to take full ownership of Sunrise as 50-50 partner Eversource completes its exit from offshore development. (See Eversource Finds OSW Buyer, Takes $1.95B Hit for 2023.) 
  • Ørsted submitted a proposal for a 1.2-GW project it calls Starboard Wind to Connecticut and Rhode Island. 
  • It is moving to secure heavy structural steel for monopile foundations and additional installation vessel capacity — two critical potential roadblocks to project construction. 
  • Ørsted and Eversource completed construction of South Fork, the first utility-scale offshore wind farm in U.S. waters; final commissioning is expected in the second quarter. (See First Large US Offshore Wind Farm Complete.) 
  • Ørsted paid out 700 million kroner — about $100 million U.S. — for wind wake losses at Hornsea 1 attributed to Hornsea 2. Wind wake loss, which is output reduction in downwind turbines because of turbulence from upwind turbines, is expected to be an issue as more and larger turbines are installed. (See Researchers Modeling Jet Stream Interference with OSW.) 
  • March was the first month ever that the company burned no coal at its seven combined heat and power plants. 
  • Ørsted agreed to sell four U.S. onshore wind farms rated at 957 MW as part of its farm-down program, in which it sells operating assets to raise money for future projects. 

When Nipper and Westlie concluded their presentations, the Q&A portion conference call became a wide-ranging forum on prospects for Ørsted amid an industry reset. 

Some of the talking points: 

What happens if Ørsted needs more monopile capacity? 

“What we are very happy to see is that the actual production of the monopiles from our key supplier for three of our projects has stabilized so now the planning becomes safer,” Nipper said. 

If Ørsted won a contract for Starboard, would that not push the company above its targets for development in the United States? 

“No, this would be with all possible likelihood for a post-2030 [commercial operation date] and COD flexibility was one of the key criteria we assessed when deciding where and with what to bid,” Nipper said. 

Regarding Ørsted’s announcement May 1 that it had secured licenses to develop up to 4.8 GW of offshore wind in Australia: Isn’t Australia a rather immature market with no offshore wind supply chain? Didn’t Ørsted just go through this scenario in the United States? 

“So, this is not a market where you should be concerned that we will end up in the U.S. situation. Because we have learned — the entire industry have learned — that it is certainly a challenge to build a new industry entirely from scratch and I think both we and the entire industry are taking those learnings,” Nipper said. He added, however, that it is important to build longer-term opportunity, and Ørsted can do it at very limited cost with this move in Australia. “We will go there with very open eyes as to what are the risks that would come with an entirely new market.” 

New York just saw an entire wind solicitation collapse because the three contracts were relying on an 18-MW GE Vernova turbine design whose development was canceled. (See NY Offshore Wind Plans Implode Again.) What turbine are you planning for Sunrise, and is it on the market yet? 

“We can confirm that this is not on a future model that we are hoping will be there,” Nipper said, without providing details. (He had disclosed earlier in the call that 11-GW Siemens Gamesa turbines would be installed at Sunrise.) 

Ørsted’s problems in the United States probably can be traced to the defunding of the Bureau of Ocean Energy Management five years ago. What risk do you face if a future president attempts to intervene in the market again? 

“Yes, you’re right, that there are certainly risks that we are very explicitly handling. Most importantly [will be] to ensure that we have all permits in place [before the 2025 inauguration], which we feel comfortable we will,” Nipper said, adding that Ørsted put so much timeline flexibility in the Starboard bid for exactly that reason. He said, however, that bipartisan support for offshore wind has evolved over those five years. “Despite some of the rhetoric, this is being recognized that a very high joint priority in both blue and red states is job creation and we do see being recognized that offshore is creating jobs.” 

Do you think offshore wind development costs have peaked, or even reached a deflationary environment? 

“I don’t think it’s possible to say whether there’s a peak in pricing. But it is a fact that the supply chain inflation is a lot less steep than where we came from. But it is still too early to say whether that is flattening or even deflationary,” Nipper said. 

How is the farm-down program going? 

“We are continuing as we have planned, and what we actually see in the market is that even though the pricing of the assets has been higher or lower due to the fact of the interest rate … we see a slightly better sort of market and also interest in that regard,” Westlie said.  

Do you plan to keep a strong presence in the U.S. onshore wind market or rebalance to Europe? 

“Clearly the U.S. will remain our biggest onshore market. We do have a pipeline, and one where we also see several attractive opportunities and also are quite excited about some of the opportunities that are in combined generation and storage,” Nipper said. 

Any update on Ørsted’s plans to reuse equipment from the canceled Ocean Wind projects in New Jersey or the Skipjack project, which is in limbo in Maryland? (See Ørsted Cancels Ocean Wind, Suspends Skipjack and Ørsted Cancels Skipjack Wind Agreement with Maryland.) 

“Not a lot of update. We do continue to mature those opportunities,” Nipper said.