Orsted looks to turn the corner as focus on project execution and de-risking pays dividends

Danish wind developer Orsted has claimed signs of success in its efforts to focus on project execution and de-risking in response to the financial headwinds that the company suffered in 2023.

Announcing its financial results for the first quarter, Orsted said ramp-up from the 900MW Greater Changhua 1 and 2a wind farm in Taiwan and the 130MW South Fork project in the US, along with higher wind speeds, had lifted operating profit (earnings before interest tax, depreciation and amortisition) to DKr7.5bn, ($1.2bn), some 8% higher than the same period last year.

Operating profit from offshore sites amounted to DKr6.9bn, an increase of 18% over the same period last year.

The increase in offshore earnings was also helped by higher prices on inflation-indexed CfDs and green certificates, but partly offset by reduced capacity in the export transmission cables at Hornsea 1 due to an issue with the electrical infrastructure.

Orsted said the Hornsea 1 issue is being resolved during the second quarter.

Progress in project execution was also reported in Germany, where the turbine installation started on the Gode Wind 3 project, part of a wider 1.3GW buildout programme in that country.

Net profit of DKr2.6bn was 19% lower than in the same quarter last year, but Orsted said this was due to the effect of a deferred tax liability on the Eleven Mile onshore project in the US.

Strategic shift

“We are working diligently on executing our business plan presented in February,” CEO Mads Nipper today (Thursday).

“During this quarter, we have been constructing 7.6GW of offshore wind across our regions, and we have reached significant milestones by finalising the construction of Greater Changhua 1 and 2a in Taiwan and South Fork in the US.

“We remain focused on project execution and on de-risking the continued supply chain challenges in the industry."

Orsted also highlighted the divestment, to Stonepeak, of equity shares in four US onshore wind farms with a total capacity of 957MW.

“And in Europe, we’ve taken the strategic decision to prioritise other markets for onshore renewables, and consequently, we’ve signed an agreement with Engie under which they will acquire our onshore wind and solar assets in France,” Nipper said.

Orsted reiterated its 2024 guidance for Ebitda, excluding new partnership agreements and cancellation fees, of DKr23-26bn, as well as gross investment of DKr48-52bn.

Among highlights the company also celebrated selection of 924MW Sunrise Wind project in New York’s Round 4 offshore wind solicitation.

Other highlights included: a bid submitted in the Taiwanese Round 3.2 auction for an award of Greater Changhua 3 offshore wind farm: participation with a 1.2 GW offshore wind project (Starboard), into Rhode Island and Connecticut solicitations; agreement with Cadeler on access to installation vessel from beginning of 2027 to end of 2030.