by Angus Young
Energy firm Ørsted has decided to “discontinue” its huge Hornsea 4 offshore wind farm development off the East Yorkshire coast.
The Danish company has already completed two wind farm schemes known as Hornsea 1 and 2 in the North Sea.
A third – Hornsea 3 – is currently under construction and is due to be completed by the end 2027.
It has been billed as the world’s largest single offshore wind farm project capable of generating enough renewable energy to power more than 3.3 million UK homes.
However, Ørsted now says the Hornsea 4 project is being “discontinued in its current form”. It was due to be built around 40 miles off Flamborough Head.
The company has cited “adverse developments” for the decision, including increased supply chain costs, higher interest rates and increased construction and operation risks associated with its previously planned timetable.
Hornsea 4 had received the go-ahead from the Government in 2023 and was due to be fully operational by the end of the decade.
Ørsted group president and chief executive officer Rasmus Errboe said: “”We remain fully committed to being an important partner to the UK government to help them achieve their ambitious target for offshore wind build-out and appreciate the work they have done to deliver a clear framework to support offshore wind.
“However, our capital allocation is based on a strict and value-focused approach, and after careful consideration, we have 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.”
“We have been maturing the project over the past nine months and have been working relentlessly with stakeholders and suppliers to manage the different project risks for a project of this scale.
“Throughout the development phase we have been very diligent in our approach to capital commitment to our suppliers, and our committed capital is well below our threshold.
“The adverse macroeconomic developments, continued supply chain challenges, and increased execution, market and operational risks have eroded the value creation.”
“I would like to emphasise that Ørsted continues to firmly believe in the long-term fundamentals of and value perspectives for offshore wind in the UK.
“We will keep the project rights for the Hornsea 4 project in our development portfolio and we will seek to develop the project later in a way that is more value-creating for us and our shareholders.”
It is not clear whether the decision means a new electricity substation due to be built near Cottingham will go ahead. It was intended to receive power from Hornsea 4 before being transferred to the National Grid at the nearby existing Creyke Beck substation.