Offshore wind developer Ørsted has reported a stable first nine months in 2020 but the slow pace of permitting in the US has forced it to further delay a quartet of offshore wind projects there
The company’s operating profit (EBITDA) amounted to Dkr13.1Bn (US$2.1Bn), a 2% increase compared to the same period last year. Earnings from offshore and onshore windfarms in operation increased by 16%, driven by the ramp-up of power generation from Hornsea 1 in the UK, Borssele 1 & 2 in the Netherlands and several onshore projects.
Ørsted president and chief executive Henrik Poulsen said, “Despite the Covid-19 pandemic, our operations and financial performance in Q3 remain stable and fully in line with our expectations from the beginning of the year.”
However, in Mr Poulsen’s review of the company’s interim results, he explained that Ørsted’s pipeline of US offshore development projects will be further delayed.
“We are still waiting for the Bureau of Ocean Energy Management (BOEM) to decide on the preferred windfarm layout for the build-out of offshore wind on the US east coast,” he explained.
“Furthermore, we are still waiting for clarity concerning the federal permitting process for our projects. We had expected to receive the Notice of Intent (NOI) from BOEM for our advanced-stage development projects at this point in time, but now foresee clarity on the permitting timelines being pushed to late 2020 or even into 2021, which constitutes a significant delay.
“Even assuming the permitting process starts moving within the first quarter next year, it appears highly likely that Revolution Wind, Ocean Wind, Skipjack and Sunrise Wind will be delayed beyond the previously expected 2023 and 2024 construction years.
“For all four projects we have some flexibility in the timeline, and we have been able to make good progress on some other project milestones in the meantime. However, until there is a clear timeline from BOEM we cannot re-baseline our construction schedules.
“With regards to South Fork, we remain comfortable about our previously communicated timeline with COD in late 2023. Despite the permitting delays, we remain confident that we can deliver our US project portfolio with satisfactory value creation. We continue to see solid long-term growth and value creation potential in US offshore wind.”
Mr Poulsen went on to say, “In Q3 2020, we reached an important strategic milestone as we completed our portfolio transformation into a global renewable energy company with the divestment of our Danish power distribution (Radius), residential customer, and city light businesses to the Danish energy company SEAS-NVE.
“The construction of offshore wind, onshore wind, and solar PV assets across the globe is progressing satisfactorily, despite the challenges caused by the pandemic and in October we submitted bids in the up to 2.5-GW auction in New York. We expect to receive the outcome of the auction before year-end.
“Together with Yara, the world’s leading fertiliser company, we have launched a joint renewable hydrogen project in the Netherlands. The project will include a 100-MW electrolyser plant generating renewable hydrogen based on Ørsted’s offshore windfarms.”
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