Orsted, the company exploring the possibility of building an offshore wind farm near the Isle of Man, has cancelled a series of projects across North America as the company faces big financial troubles. This is bad news for Manx consumers, with global pressures meaning that any offshore wind farm is less likely to offer affordable electricity. This may place additional stress on Manx energy costs.

This crisis has led to shares in Orsted slumping approximately 40% in 2023, calling into doubt the capacity of the firm to build wind farms off the Isle of Man. Bloomberg reports that the Danish firm posted its worst quarterly loss in history

S&P Global reported late last year:

Denmark’s Ørsted A/S, the world’s largest offshore wind developer, has scrapped two major projects off the US East Coast and recorded impairments worth 28.4 billion Danish kroner amid a challenging development environment driven by rising interest rates and supply chain congestion.

Ørsted said late Oct. 31 that it has ceased development of its 1,100-MW Ocean Wind 1 and 1,148-MW Ocean Wind 2 projects off New Jersey as part of an ongoing review of its US offshore wind portfolio.

The company’s stock was trading more than 18% lower at 11:30 a.m. in Copenhagen, Denmark, on Nov. 1, hitting a six-year low.

Ørsted cancels 2 US offshore wind projects as impairments reach $4B

Bloomberg reported on the crisis within the company:

The huge writedown is deeper than investors and analysts feared and just the latest in a string of bad news from an industry vital to slow global warming. Surging costs and rising interest rates have led to project delays and Germany’s Siemens Energy AG is in talks with the government to help shore up its balance sheet…

…“An impairment of this magnitude is something that puts additional pressure on our capital structure and we are in the midst of several initiatives including cost savings,” Chief Executive Officer Mads Nipper said in a call with reporters. “There’s no doubt that the global offshore wind industry, not only in the US, is finding itself in a perfect storm.”

Orsted Takes $4 Billion Hit on Abandoned US Wind Projects

The Odd Lots podcast, hosted by Tracy Alloway and Joe Weisenthal, has discussed the financial problems of the offshore wind industry. The full podcast is available online here.

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Michael Josem is a long-term consumer advocate, most prominently as a global leader in combating fraud in the online gambling industry. He was in part the inspiration for the 20th Century Fox Movie, Runner Runner, starring Ben Affleck and Justin Timberlake.

Josem has over a decade of experience as a senior business leader working across various high-tech and online industries, and takes action to build a better community. His primary volunteer roles include service for the Commonwealth War Graves Commission, and Graih, the homelessness charity.