A number of days in the past, Ørsted referred to as it quits on the Ocean Wind 1 offshore wind farm within the US, with a few of the principal points resulting in the choice to desert the mission being provide chain bottlenecks, primarily vessel shortages. This has affected not solely the now-dropped Ocean Wind 1 but additionally the corporate’s Revolution Wind and Dawn Wind initiatives within the US, in addition to Changhua 1 and 2a in Taiwan.
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Ørsted introduced its choice to stop the event of the Ocean Wind 1 and Ocean Wind 2 initiatives in New Jersey on 31 October, making headlines with the choice as Ocean Wind 1 entered the development stage earlier this 12 months after getting the federal inexperienced gentle.
The corporate stated extra provider delays had been additional impacting the mission schedule and resulting in an extra vital delay (and prices) to the mission. In its monetary report for the 9 months of 2023 revealed on 1 November, Ørsted particulars on the choice, revealing vessel availability as the primary stumbling block.
In response to the report, the problem has affected the timelines of its Revolution Wind and Dawn Wind mission within the US and the Changhua 1 and 2a offshore wind farm in Taiwan, on which development work is underway.
“The Ocean Wind 1, Dawn Wind, and Revolution Wind initiatives have been adversely impacted by provide chain bottlenecks. We’ve got concluded that excellent dangers stay in these suppliers’ capability to ship on their commitments and contracted schedules, together with worldwide vessel shortage. This might create knock-on results, requiring future remobilisations to complete set up, in addition to doubtlessly delayed revenues, additional prices, and different enterprise case implications,” the developer states within the report.
Moreover reporting impairment losses associated to its US initiatives and asserting the cease in progressing Ocean Wind initiatives, Ørsted says it now assumes “a brand new set up strategy with an extended timeline for Revolution Wind and Dawn Wind.” Moreover, wanting on the data within the report, the Dawn Wind offshore wind mission will not be a totally sure wager both.
‘Revolution Wind Has an Enticing Ahead-Trying Worth Creation’
On the 704 MW Revolution Wind, the developer made the ultimate funding choice (FID) across the similar time the corporate determined to drop Ocean Wind initiatives.
“However the impairment of DKK 3.3 billion that we recorded in our Q3 outcomes, Revolution Wind has a lovely forward-looking worth creation with a forward-looking unfold to WACC above our guided vary,” Ørsted says within the monetary report.
The Bureau of Ocean Power Administration (BOEM) issued a Report of Resolution (ROD) to approve Revolution Wind’s development and operation plan in August and the ultimate approval is anticipated to be made this month.
In the meantime, onshore development has already began, with offshore development deliberate to start out in 2024 and the mission anticipated to be accomplished in 2025.
As soon as up and working, the 704 MW Revolution Wind will ship 400 MW of offshore wind energy to Rhode Island and 304 MW to Connecticut.
Dawn Wind Nonetheless Not Out of the Woods
As reported on 1 November, Ørsted recognised impairment losses of DKK 28.4 billion (about EUR 3.8 billion) within the first 9 months of 2023, nearly all of that are associated to Ocean Wind 1, with the corporate saying that this was on account of antagonistic impacts relating to produce chain delays, elevated rates of interest, and the shortage of an Offshore Wind Renewable Power Credit score (OREC) adjustment on Dawn Wind.
Ørsted and Eversource signed a 25-year OREC settlement with the New York State Power Analysis and Growth Authority (NYSERDA) in 2019, with an OREC strike worth of USD 110/MWh.
This summer time, the developer filed a petition with the New York State Public Service Fee (PSC) looking for worth changes to the contract that might improve the OREC worth by 27 per cent to USD 140/MWh on account of vital price and inflation will increase because the settlement was entered into. The request was denied this October.
As for Revolution Wind, on account of provide chain bottlenecks and vessel availability points, Ørsted expects an extended timeline for the Dawn Wind mission too.
The developer says that it’s going to have a possibility to rebid the Dawn Wind mission within the accelerated solicitation that the State of New York introduced following its third procurement, and at a bid worth stage reflecting the present element and financing prices.
Nonetheless, the corporate famous that it’s going to look forward to the circumstances of the request for proposal (RFP) to be issued and decide whether or not to rebid.
In a phase of its newest monetary report speaking concerning the EBIDTA steerage, Ørsted says that additional antagonistic improvement of Dawn Wind might result in ceasing this US mission as effectively.
New York State chosen Dawn Wind, positioned in federal waters greater than 48 kilometres (30 miles) east of Montauk Level, as a part of NYSERDA’s inaugural aggressive 2018 offshore wind solicitation.
At 924 MW, the Dawn Wind offshore farm is the biggest offshore wind farm but that might be related to New York’s electrical grid.
Larger Changhua 1 & 2a Completion Pushed Again to 2024
One other Ørsted mission is experiencing delays on account of bottlenecks within the provide chain – the 900 MW Larger Changhua 1 & 2a wind farm mission offshore Taiwan, the place development is nearing completion.
Nonetheless, it’s going to now take extra time than anticipated to put in the final eleven wind generators and, in line with data in Ørsted’s report, wind turbine set up is not going to be accomplished by the top of this 12 months, as anticipated, however in early 2024.
The corporate says that every one 111 jacket foundations and 100 wind generators have been put in at Larger Changhua 1 & 2a to date, with 89 wind generators now commissioned and producing energy underneath the subsidy.
Nonetheless, whereas the ultimate development work is progressing, as a result of climate and lack of set up vessel availability, all of the mission’s wind generators is not going to be in place earlier than year-end. “We goal to put in and fee the remaining wind generators throughout Q1 2024,” the corporate says.
The wind farm produced first energy in April 2022, after the set up and energisation of the primary batch of its Siemens Gamesa SG 8.0-167 DD generators.
This isn’t the primary delay for Larger Changhua 1 & 2a, because the mission was initially scheduled to be absolutely operational by the top of 2022, however on account of COVID-19-related delays, the commissioning was pushed to 2023.
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