© Supplied by Orsted 
Ørsted has announced it will discontinue construction on its Hornsea 4 offshore wind project in the UK, despite recently securing a Contract for Difference (CfD).
The Danish developer said the 2.4 GW project has seen “several adverse developments” since securing a CfD in the sixth allocation around (AR6).
These include increasing of supply chain costs, higher interest rates, and an increase in the risk to construct and operate Hornsea 4 on the planned timeline, Ørsted said.
“In combination, these developments have increased the execution risk and deteriorated the value creation of the project,” the company added.
As a result, Ørsted said it will stop further spend on Hornsea 4 and terminate the project’s supply chain contracts.
This means the project, located 69km off the Yorkshire coast, will not be delivered under the CfD awarded in AR6.
Following the announcement, the UK government said it will work with Ørsted to get Hornsea 4 “back on track”.
Overall, Ørsted said it expects to incur break-away costs of between DKK 3.5bn to 4.5bn (£400m to £512m) in 2025 due to its decision on Hornsea 4.
The developer said it will “evaluate options for future development” of Hornsea 4, giving it will retain seabed rights, a grid connection agreement and planning consent.
The decision to discontinue Hornsea 4 comes shortly after Ørsted divested a 24.5% stake in the UK’s West of Duddon Sands offshore wind farm for £456 million.
Ørsted ‘fully committed’ to UK offshore wind targets
Ørsted chief executive and group president Rasmus Errboe said the company remains “fully committed” to helping the UK government achieve its “ambitious target for offshore wind”.
Errboe also said the Danish firm appreciate the work the Labour government has done to “deliver a clear framework to support offshore wind”.
“However, our capital allocation is based on a strict and value-focused approach, and after careful consideration, we’ve decided to discontinue the development of the Hornsea 4 project in its current form, well ahead of the planned final investment decision later this year,” he said.
© Supplied by OrstedErrboe said Ørsted has been working “relentlessly” with stakeholders and suppliers to manage the risks to Hornsea 4 over the last nine months.
“Throughout the development phase we’ve been very diligent in our approach to capital commitment to our suppliers, and our committed capital is well below our threshold,” he said.
“The adverse macroeconomic developments, continued supply chain challenges, and increased execution, market and operational risks have eroded the value creation.”
Errboe said Ørsted continues to “firmly believe in the long-term fundamentals of and value perspectives for offshore wind in the UK”.
Meanwhile, a spokesperson for the UK’s Department for Energy Security and Net Zero told Energy Voice: “We recognise the effect that globally high inflation and supply chain constraints are having on industry across Europe, and we will work with Orsted to get Hornsea 4 back on track.
“We have a strong pipeline of projects to deliver clean power by 2030 and our mission-led approach ensures we can steer our way through global pressures and individual commercial decisions to reach our targets.”
Ørsted Q1 financial results
The Hornsea 4 announcement came as Ørsted released its first quarter financial results for 2025.
The company recorded operating profit of DKK 8.9 billion (£1bn) in Q1, up nearly 19% compared to the same period last year.
Ørsted said earnings from its offshore sites amounted to DKK 7.7 billion (£878m), an increase of DKK 0.7 billion (£79m) compared to the same period last year.
The increase was due to the ramp-up of generation at the German offshore wind farm Gode Wind 3 and higher availability, Ørsted said. This was partly offset by significantly lower wind speeds in the quarter.
Profit for the period totalled DKK 4.9 billion (£559m), an increase of DKK 2.3 billion (£262m) compared with Q1 2024.
The improved financial result for Ørsted comes after fellow Danish firm Vestas also recorded better than expected Q1 earnings.
