Ørsted has cancelled development of its 2.4 gigawatt (GW) Hornsea 4 offshore wind farm off the east coast of England, citing rising supply chain costs, higher interest rates, and increased construction and operational risks, the Danish energy group said on Tuesday.
Hornsea 4 had secured a UK Contract for Difference (CfD) in September 2024 but will not proceed in its current form, the company confirmed in its first-quarter results announcement.
“Since the award, the project has seen several adverse developments relating to continued increase of supply chain costs, higher interest rates, and an increase in the risk to construct and operate Hornsea 4 on the planned timeline for a project of this scale,” Ørsted stated.
Rasmus Errboe, Ørsted’s chief executive, said: “The combination of increased supply chain costs, higher interest rates, and increased execution risk have deteriorated the expected value creation of the project. 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.”
The cancellation aligns with the company’s revised capital allocation framework, which emphasises early decision-making to limit sunk costs. Ørsted said the move is expected to result in a second-quarter EBITDA impact of between 3.0 billion and 3.5 billion Danish crowns (up to €470 million), including a writedown of offshore transmission assets and contract cancellation provisions. Additional impairments of capitalised construction costs between 500 million and 1.0 billion crowns are also anticipated.
Despite shelving Hornsea 4, Ørsted signalled its continued interest in UK offshore wind, saying the rights to the project remain in its development portfolio. “We’ll seek to develop the project later in a way that is more value-creating for us and our shareholders,” Errboe said.
Hornsea 4 was intended to be the latest phase in Ørsted’s flagship Hornsea cluster. The decision to halt its development comes amid wider challenges in the offshore wind sector, where developers globally have reported rising costs and inflationary pressures impacting project viability.
In the first quarter of 2025, Ørsted reported operating profit (EBITDA) of 8.9 billion crowns, up from 7.5 billion in the same period last year. Offshore wind earnings contributed 7.7 billion crowns, boosted by the ramp-up of Germany’s Gode Wind 3 project, though partially offset by lower wind speeds.
RenewableUK’s deputy chief executive Jane Cooper described the decision as “disappointing,” but said the UK remains a leading market for offshore wind. “The unique cost pressures faced by Hornsea 4 have led to a rethink on this particular project,” she said, urging the government to adjust auction parameters to reflect current cost realities.
