Ørsted has today decided to discontinue the Hornsea 4 project in the UK
London, UK – Danish energy giant Ørsted has announced the discontinuation of its Hornsea 4 offshore wind farm project, dealing a significant setback to the UK’s renewable energy ambitions. The decision comes amid rising costs, supply chain challenges, and unfavorable government auction terms, raising concerns about the future of large-scale offshore wind development in the region.
Why Was Hornsea 4 Cancelled?
Ørsted cited several key factors behind the decision:
Economic Viability: Soaring inflation and increased financing costs have made large offshore projects less profitable.
Supply Chain Disruptions: Delays in turbine production and rising material costs have pushed budgets higher.
Inadequate Government Support: The company criticized the UK’s Contracts for Difference (CfD) scheme, arguing that the auction price caps do not reflect current market realities.
The Hornsea 4 project, which was expected to deliver up to 2.6 GW of clean energy—enough to power over 3 million homes—was a critical part of the UK’s plan to reach 50 GW of offshore wind capacity by 2030.
Industry and Political Reactions
Renewable Energy Advocates: Warn that the cancellation could slow the UK’s net-zero progress and jeopardize energy security.
UK Government: Defended its renewable energy policies but faces pressure to revise subsidy mechanisms to attract investment.
Competitors: Other offshore wind developers, including RWE and SSE, are also reassessing projects under current economic conditions.
What’s Next for UK Offshore Wind?
Ørsted remains committed to its existing UK projects, including Hornsea 3, but the Hornsea 4 cancellation signals broader challenges in the sector. Analysts suggest that without policy adjustments, more delays or cancellations could follow, threatening the UK’s climate targets.
Conclusion
The shelving of Hornsea 4 highlights the fragile state of the offshore wind industry amid global economic pressures. If the UK wants to maintain its leadership in renewable energy, it may need to rethink its support mechanisms to keep major projects viable.