UK’s Offshore Windfarm Plans Hit by Major Blow as Danish Firm Shelves Project
A significant setback has been dealt to the UK government’s green energy targets after Ørsted, the world’s biggest wind power developer, cancelled plans for one of the country’s largest offshore windfarms. The Danish wind power company announced that the Hornsea 4 project, located off the Yorkshire coast, was no longer economically viable due to soaring costs in the industry’s global supply chain.
According to The Guardian, Ørsted’s decision to halt work on the project is a major blow to the government’s plan to quadruple the UK’s offshore wind capacity by the end of the decade to help create a virtually fossil-free electricity system. The fourth phase of the huge Hornsea windfarm was expected to use 180 giant turbines to generate enough green electricity to power the equivalent of 1m homes, or 2.4 gigawatts of power capacity.
Ørsted’s chief executive, Rasmus Errboe, cited “the combination of increased supply chain costs, higher interest rates and increased execution risk” as the reasons for the project’s cancellation. This decision follows a similar move by the Swedish energy company Vattenfall in 2023, which stopped work on the multibillion-pound Norfolk Boreas windfarm in the North Sea, citing that it was no longer profitable.
The wind industry has been facing short-term challenges such as supply chain issues and “regulatory and macroeconomic developments,” according to Ørsted. These problems have raised concerns over the UK government’s renewable energy goals and have piled pressure on its auction for new renewable energy contracts. The government plans to double the UK’s onshore wind, triple its solar power, and quadruple its offshore wind power capacity by the end of the decade.
As reported by The Guardian, Dhara Vyas, the chief executive of Energy UK, which represents the industry, said the loss would “raise the stakes” on the next auction round, due in the summer, and added that it was “vital that the government doubles down to ensure [it] is a success.” Jane Cooper, the deputy chief executive of RenewableUK, another industry group, called on the government to rule out the introduction of controversial plans to overhaul the electricity market by introducing “zonal pricing,” which would “drive the cost of investment up even further.”
A government spokesperson said it continues to have “a strong pipeline of projects” to deliver clean power by 2030 and would work with Ørsted to get Hornsea 4 “back on track.” However, for US windfarm developers, the economic challenges facing the industry have been compounded by the incoming Trump administration’s vow to end offshore wind development “on day one.”
Despite the setbacks, Ørsted said the long-term outlook for offshore wind was strong because of the world’s growing demand for electricity and a fresh focus on “energy security and affordability” that renewable energy provides. Ørsted’s latest project cancellation comes after a turbulent time for the company, which resulted in it implementing a restructuring plan in 2024, while it cancelled dividend payouts to shareholders for the 2023-25 financial years in an attempt to bolster its finances.
The UK government’s renewable energy goals are under scrutiny following Ørsted’s decision to shelve the Hornsea 4 project. As The Guardian previously reported, the government hopes to relegate gas plants to just 5% of the UK’s electricity generation by 2030 to create a clean power system.
The Hornsea 4 project was awarded a government contract two years ago, but Ørsted has now decided that it is no longer viable. The project’s cancellation highlights the challenges facing the wind industry, including soaring costs and supply chain issues.
Industry experts are now calling on the government to take action to support the industry. As reported by The Guardian, RenewableUK’s Jane Cooper said that the government must ensure that the auction’s parameters reflect the industry’s costs.
The cancellation of the Hornsea 4 project is a significant blow to the UK’s offshore windfarm plans, but Ørsted remains committed to the development of renewable energy. The company’s chief executive, Rasmus Errboe, emphasised that the long-term outlook for offshore wind is strong, driven by growing demand for electricity and a focus on energy security and affordability.
This news article is based on a report by The Guardian: “Danish firm shelves huge UK windfarm project over rising costs” (https://www.theguardian.com/business/2025/may/07/danish-firm-shelves-huge-uk-windfarm-project-over-rising-costs).
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