As part of the continued maturation and a pre-final investment decision (FID) review of its near-term US offshore development projects, Ørsted has assessed the aggregate adverse impacts relating to the supply chain, lack of favorable progress in Investment Tax Credit (ITC) guidance, and increased interest rates, which affect its US portfolio.
The Ocean Wind 1, Sunrise Wind, and Revolution Wind projects are adversely impacted by a handful of supplier delays. Ørsted has concluded that there is a continuously increasing risk in these suppliers’ ability to deliver on their commitments and contracted schedules. This could create knock-on effects requiring future remobilizations to finish installation, as well as potentially delayed revenue, extra costs, and other business case implications. These impacts will lead to impairments of up to
In addition, our continued discussions with senior federal stakeholders about additional ITC qualifications for
Furthermore, the US long-dated interest rates have increased, which affect our US offshore projects and certain onshore projects. If the interest rates remain at the current level by the end of third quarter, it will cause impairments of approximately
The impairments relating to
While Ørsted’s near-term US offshore wind development portfolio does not meet our value creation target on a lifecycle basis, we remain convinced that the value-creation of the portfolio will be within 150 to 300 basis points spread-to-WACC on a forward-looking basis.
Adjusted for the anticipated impairments, we maintain a ROCE target for the period 2023-2030 of approximately 14%.
Ørsted continues to progress projects
Ørsted will continue to progress the US near-term offshore wind projects including obtaining final federal and local permits, working with suppliers to mitigate delays and continuing our dialogue with stakeholders to try to qualify for at least 40% ITCs on all projects.
We will work towards taking FID on
The information provided in this announcement does not change Ørsted’s previous EBITDA guidance for the financial year of 2023 or the announced expected investment level for 2023.
Call with management
For analysts: Ørsted will host an analyst call tomorrow, Wednesday 30 August, at
For media: CEO
Investor call
Please register via this link
Operator assisted dial-in:
For global dial-in numbers please click here
Access code:982431
Media call 09:00-09:45 CEST
Please register via this link
Operator assisted dial-In:
For global dial-in numbers please click here
Access Code: 253003
For further information, please contact:
Media Relations
+45 99 55 60 17
tomlc@orsted.com
Investor Relations
Rasmus Keglberg Hærvig
+45 99 55 90 95
ir@orsted.com
Attachments
- CA OCW1.pdf
© Ritzau Denmark, source