Supply-chain issues and rising costs lead to major decision

  • Orsted books $4 billion impairment charge in Q3
  • Company walks away from two US offshore wind projects
  • Impairments due to supply-chain issues, higher interest rates, and lack of funding adjustment
  • Ceases development of Ocean Wind 1 and 2 projects
  • Proceeds with Revolution Wind project offshore Rhode Island

Orsted, the Danish renewable-energy company, has booked a $4 billion impairment charge in the third quarter related to its US offshore wind portfolio. The impairments are a result of supply-chain issues, higher interest rates, and a lack of funding adjustment. As a result, Orsted has decided to cease development of two wind farm projects off the coast of New Jersey, Ocean Wind 1 and 2. The company expects to book a provision of $1.4 billion to $1.9 billion in the fourth quarter to cover contract cancellation fees. However, Orsted will proceed with the Revolution Wind project offshore Rhode Island, which is expected to be completed in 2025.

Public Companies: Orsted (N/A), Eversource (N/A)
Private Companies:
Key People: Mads Nipper (Chief Executive)

Factuality Level: 8
Justification: The article provides specific details about Orsted’s impairment charge and the reasons behind it, including supply-chain issues, higher interest rates, and delays in project schedules. The information is presented in a factual manner without any obvious bias or opinion. However, it would be helpful to have more context about the overall financial health of Orsted and the impact of the impairment charge on its business.

Noise Level: 7
Justification: The article provides relevant information about Orsted’s impairment charge and the decision to stop development of two wind farm projects. It mentions the reasons behind the impairment charge, such as supply-chain issues, higher interest rates, and lack of funding adjustment. However, the article lacks in-depth analysis or exploration of the consequences of these decisions on stakeholders or the renewable energy industry as a whole. It also does not provide actionable insights or solutions for the challenges faced by Orsted. Overall, the article contains some relevant information but lacks depth and analysis.

Financial Relevance: Yes
Financial Markets Impacted: Orsted

Presence of Extreme Event: No
Nature of Extreme Event: No
Impact Rating of the Extreme Event: No
Justification: The article pertains to financial topics as it discusses Orsted’s impairment charge and the decision to stop development of two wind farm projects. However, there is no mention of an extreme event.