EnergyWatch

Ørsted downgrades long-term return forecast for offshore wind

New figures show a historic undervaluation of negative effects from offshore wind generation, prompting the utility to revise its long-term targets in the negative direction and kick-start a round of cost-cutting measures.

Photo: HENNING BAGGER/Henning Bagger / henning bagger

Tuesday at noon, Ørsted launches a most noteworthy triple-stage rocket – a rocket that has not only exploded into magnificent colors, but has also turned out to be something of a dud that caused the utility's share price to slide by around 10 percent. Ørsted downgrades its long-term return guidance to 7-8 percent from 7.5-8.5 percent and sets off to cut costs totaling DKK 500-600 million for the period 2020-'22.

This is no less conspicuous when considering all three rocket stages. Two of these are in a certain sense quite classic; in part, there are the lower power tariffs in Taiwan following the government's sluggishness on issuing timely licenses to the Changhua projects this year. In part that developing projects in the US has turned out to be more expensive than anticipated after the acquisition of Deepwater Wind, especially due to the price of a transmission facility.

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