Equinor, the energy company involved in various renewable energy ventures, has recognized a $300 million impairment on its US offshore wind projects. The impairment, as outlined in the group's third-quarter report, is attributed to three major projects: Beacon Wind (1230MW), Empire Wind 1 (816MW), and Empire Wind 2 (1260MW), all developed in collaboration with bp along the US Northeast Coast. These projects were negatively impacted by cost inflation and supply chain constraints.
Furthermore, recent developments in New York added to the challenges. The New York Public Service Commission rejected petitions from Equinor and other companies seeking to amend the previously agreed-upon prices in their offtake agreements with the state. Equinor is currently evaluating the implications of this decision on its ongoing projects.
The impairment has contributed to a decline in Equinor's net operating income in the third quarter of 2023 and the first nine months of the year. The company reported a decrease to $7.45 billion in net operating income in the third quarter of 2023, compared to $26 billion in the same period in 2022. Similarly, for the first nine months of 2023, Equinor's net operating income dropped to $27 billion from $62.2 billion in the corresponding period of the previous year. The company attributed this decline to the impairment, higher development costs in 2023, and the recognition of a divestment gain in the first nine months of 2022.
Despite these challenges, Equinor reported a notable increase in power production from renewable energy sources in the third quarter. Power production from renewables reached 373 gigawatt-hours (GWh) during the quarter, up from 294 GWh in the same period the previous year. This increase was driven by heightened production from UK wind farms, the introduction of new onshore renewables in Poland, and the full production of the floating wind farm, Hywind Tampen.
Anders Opedal, President and CEO of Equinor ASA, commented on the company's ongoing transition, highlighting significant achievements such as the Dogger Bank offshore wind farm in the UK, which is the world's largest, as well as expansions in onshore renewables in Brazil and Poland.