Offshore wind industry crisis has only just begun

2023-08-31 18:45:10

Construction site of an offshore wind farm in north-west France

There is an enormous gap between expansion targets and production capacities.

(Photo: IMAGO/Andia)

Dusseldorf First, the energy company Vattenfall stops a mega wind project in Great Britain. Now Orsted, the world’s largest offshore operator, has to write off $730 million. This was announced by the Danish company. The reason: The projects have become too expensive. Delivery delays, inflation and rising interest rates make wind turbines on the high seas a bad business for many companies.

“We have come to the conclusion that our suppliers’ ability to meet their commitments and contract schedules is increasingly at risk,” says Orsted boss Mads Nipper. “That could result in potential revenue delays, additional costs and other business impacts.” The energy company’s stock fell more than 25 percent after the announcement.

In the offshore industry, “the perfect storm is brewing,” warned RWE boss Markus Krebber recently. It’s not just rising financing costs that are causing problems for the industry. There is an enormous gap between expansion targets and production capacities.

Expansion goals are at risk

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