US offshore wind perils continue for Ørsted with delay of Revolution Wind
Bojan Lepic August 16, 2024
After the New Jersey Board of Public Utilities (NJBPU) formally stopped Ørsted’s Ocean Wind One and Two projects, the Danish developer has been forced to delay another major project in the US.
Even though Ørsted decided to cease the development of its Ocean Wind One and Two late last year citing surging costs facing the global wind power industry as the main reasons, the New Jersey Board of Public Utilities formally vacated all orders that approved the two projects earlier this week.
On top of that, Ørsted pushed back the start of commercial operations at its 704MW Revolution Wind project off the coast of Rhode Island and Connecticut by a year, to 2026. According to the company’s second-quarter financial results, the delay would contribute to an impairment cost of around $472m.
To make it even more coincidental, the Revolution Wind FID was made around the same time as the decision to abandon Ocean Wind One and Two. Revolution Wind is owned 50-50 by Ørsted and Eversource.
The perils of the Danish company and the cancellation of the two US projects led them to cut 800 jobs and exit several markets in February. Ørsted said at the time that it would withdraw from markets in Norway, Spain, and Portugal and suspend dividend payments covering the 2023-2025 fiscal years in an attempt to recover.
Trouble does seem to compound for the firm as it also decided to abandon FlagshipONE, a project which was set to become Europe’s largest e-methanol plant for shipping fuel in 2025. The decision came nearly two years after the project’s FID and Ørsted cited slow market progress and an inability to sign long-term offtake contracts as the two main reasons for it.
https://splash247.com/us-offshore-wind-perils-continue-for-orsted-with-delay-of-revolution-wind/
Ørsted pulls the plug on European e-methanol project
Adis Ajdin August 16, 2024
Danish utility Ørsted has abandoned its pioneering e-methanol project under construction in northern Sweden, blaming poor market growth and difficulty in securing long-term offtake contracts.
Ørsted assumed full ownership and took a final investment decision on the project called FlagshipONE in late 2022 – originally developed by Liquid Wind and touted at the time as the largest FID’ed green e-methanol project in Europe.
It was the company’s first commercial-scale Power-to-X facility described as an important stepping stone towards Ørsted’s ambition of establishing itself as a top player in green fuels for shipping.
“While we were aware of the substantial uncertainties and risks associated with the development of a pioneering and immature liquid e-fuel project and market at the time of the FID, it was a strategic choice to take a leading position in shaping the industry,” Ørsted said in its earnings statement.
Methanol has become the most popular alternative fuel in the global newbuild orderbook alongside LNG, but its high cost has kept operators from signing up for the fuel in the long term.
Ørsted said the industrialisation of the technology as well as the commercial development of the offtake market have progressed significantly slower than expected.
“The business case has deteriorated during maturation due to the inability to sign long-term offtake contracts at sustainable pricing and significantly higher project costs,” Ørsted noted, adding that moving forward it would de-prioritise its efforts within the liquid e-fuel market.
Located in Örnsköldsvik, the factory was expected to enter into operation in 2025 and produce around 50,000 tonnes of e-methanol each year.
https://splash247.com/orsted-pulls-the-plug-on-european-e-methanol-project/