Burbo Bank, Liverpool Bay, England, seen from the ocean generators on Burbo wind farm off the UK coast.
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Danish renewables giant Orsted on Wednesday announced plans to chop jobs, pause its dividend payouts to shareholders and exit several offshore wind markets after a tumultuous year of rising prices.
Orsted, the world’s largest offshore wind developer, mentioned it deliberate to take steps “to turn into a leaner and extra environment friendly” group following a year marked by “substantial challenges.”
These measures embody a discount of as many as 800 jobs worldwide, a pause for dividends for the monetary years 2023 to 2025 and a retreat from markets in Norway, Spain and Portugal.
Shares of Orsted traded 1% decrease at 11 a.m. London time (6 a.m. ET).
The Copenhagen-listed inventory value has fallen greater than 40% during the last 12 months, with the corporate beset by challenges dealing with the broader wind business. Supply chain disruption and better rates of interest sent wind energy stocks tumbling final year.
“Despite a year with robust underlying enterprise progress, 2023 marked a year with substantial challenges for Ørsted,” Mads Nipper, chief govt of Orsted, mentioned in an announcement.
Nipper mentioned the corporate’s monetary outcomes had been “adversely affected” by impairments on U.S. offshore tasks taken within the third quarter of 2023.
Orsted canceled two main offshore wind farm tasks within the U.S. late final year, citing excessive inflation, rising rates of interest and provide chain bottlenecks.
William Pettitt, offshore infrastructure building supervisor with Orsted, steps inside a monopile on the EEW wind turbine manufacturing facility in Paulsboro, New Jersey on July 14, 2023.
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Orsted mentioned it was now concentrating on 35 to 38 gigawatts (GW) of energy era capability by the top of the last decade, a downward revision from its earlier goal of fifty GW.
Project cancelations and the phasing out of capital expenditure throughout the portfolio will end in roughly 35 billion Danish kroner ($5.05 billion) of capital expenditure reduction in 2024 to 2026, the corporate added.
“We’ve revisited our portfolio to prioritise progress choices with the best potential for worth creation and on the similar time cut back dangers within the improvement and execution of our tasks,” Nipper mentioned.
“We stay optimistic about the way forward for the renewable vitality business, and we’re assured we generally is a key contributor in accelerating the renewable build-out within the years to return.”