Ørsted president and chief executive Henrik Poulsen says that, despite the Covid-19 crisis and its profound impact on societies around the world, the company has had a very good start to 2020, with strong financial results and solid operational performance
However, Mr Poulsen also warned of potential issues with suppliers and of delays in the US market.
“Our construction projects all remain on track,” said Mr Poulsen, in what is a sign of the relatively robust good health of the offshore wind industry compared to some other industries.
“However, across our projects, we see an increased risk of component and service delays from suppliers impacted by Covid-19.
“We collaborate closely together with our partners to mitigate these situations as best possible and without compromising health and safety standards.
“Based on our current outlook, we believe the Covid-19 related impact on our construction projects will be limited both in terms of timing and economics.
“Our offshore development projects in the US are moving forward, although at a slower pace than originally expected due to a combination of the Bureau of Ocean Energy Management’s (BOEM) prolonged analysis of the cumulative impacts from the build-out of US offshore wind projects, and now also Covid-19 effects.
“The two earliest projects in our pipeline, the 120-MW Skipjack project in Maryland and the 130-MW South Fork project in New York, are most exposed to the risk of delays.
“For Skipjack it is no longer realistic to receive the Notice of Intent from BOEM in due time to meet the commissioning date in late 2022. Therefore, we now expect to commission the windfarm approximately one year later.
“For the South Fork project, which was also planned for a 2022 commissioning date, we have received the Notice of Intent but have not received a confirmed permit schedule from the federal government outlining when the Construction and Operations Plan (COP) will be received.
“This combined with impacts from the Covid-19 related shutdowns in New York, will also very likely delay South Fork to beyond 2022.”
“For our largest awarded US development projects – Revolution Wind, Ocean Wind, and Sunrise Wind – with expected commissioning in 2023 and 2024, we also see increased risk of delays.
“We have submitted our COP applications for Ocean Wind and Revolution Wind and are awaiting BOEM to issue their Notices of Intent outlining the timeline for COP approval.
“For Sunrise Wind in New York, we are currently unable to progress our offshore site surveys due to Covid-19 restrictions, which adversely impacts our COP application process.
“So, for these three projects, we need more visibility on the path to COP approval before concluding whether commissioning in 2023-24 remains realistic. We expect to have more clarity after summer.”
Mr Poulsen said, “We are in a much less vulnerable position than many other sectors that are deeply impacted by the crisis. However, the impact of Covid-19 will have material ripple effects throughout all economies and sectors, and we cannot be complacent about its potential impact on us.
“We remain vigilant about the unfolding crisis and have identified a number of risks that potentially can impact our activities.”
Ørsted has also confirmed that it will submit a bid in the 760-MW Hollandse Kust Noord tender in the Netherlands. Ørsted is currently constructing the Borssele 1 & 2 offshore windfarm in the Dutch part of the North Sea, which will be fully operational later this year. The project recently delivered first power.
Ørsted Offshore executive vice president and chief executive Martin Neubert said, “The Netherlands has ambitious climate targets for both the energy and industrial sectors and is an important market to us. We have delivered a strong bid with a high degree of risk mitigation. We commend the Dutch government for holding on to its tender timelines and its renewable energy targets during a time of global uncertainty. We urge governments worldwide to continue the transition from black to green energy at full speed in order to fight climate change and promote sustainable investment in economic growth and job creation.”
Ørsted said its bid includes ‘innovative technologies’ that will help integrate ever larger amounts of offshore wind in the Dutch energy system. Ørsted’s board of directors has already approved the final investment decision for the project.
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