Ørsted has flagged its offshore wind projects in the US for the second time this year as it is continuing to meet difficulties with suppliers and is stuck in bureaucratic procedures.
Ørsted’s US challenges to some degree should be expected as the US offshore wind market is still immature. Ørsted has not pointed fingers at individual suppliers. However, Dominion recently stated its new build Jones’ act-compliant vessel “Charybdis” has been delayed and will not be delivered before late 2024 or early 2025. The issue for Ørsted is that it has hired “Charybdis” to install turbines on both Revolution Wind and Sunrise Wind between early/mid 2024 to early 2025. Getting a replacement vessel is easier said than done, but not impossible. There are very few competitive vessels available as the long-term agreements are drying up the vessel market, and those left can jack up the price.
Between Ørsted’s preliminary 2022 earnings and 2023 guidance report earlier this year and yesterday’s announcement about anticipated impairments on its US portfolio, it is clear that Ørsted is getting hit hard in the US, and it’s very possible that the high cost for installation vessels has something to do with it.
Image source: Ørsted
