Orsted CEO insists troubled US project Sunrise Wind can make profit

Nipper acknowledged adverse effects including a later expected commissioning date at Sunrise Wind due to an extension of the turbine installation period and subsequent higher costs for installation vessel chartering, as well as the remanufacturing of export cables.

Even taking these into account, “Sunrise Wind continues to be a profitable project with a mid-single-digit life-cycle IRR [internal rate of return] and attractive, forward-looking IRR,” Nipper said during a call to investors.

But Nipper added: “This assessment does not take into account any potential initiatives of the incoming US administration.”

As the impairment notice was given prior to Trump’s signing of the decree banning new offshore wind seabed leases, it wasn’t immediately clear whether further damage to the company or the Sunrise Wind project could emerge following the president’s anti-wind actions.

“We, of course, have taken note of the executive order issued for offshore wind late Monday evening, so you will understand that because it was issued late last night, we are in the process of reviewing it to assess the impact on our portfolio,” Nipper said, adding the company would comment on this and other issues when presenting its 2024 financial results on 6 February 2025.

Nipper did reveal a bit, however.

Asked whether there could be further impairments due to a lack in the valuation of Orsted’s seabed leases, Nipper said that “the sum of our seabeds in the US is not material in our balance sheet.”

As part of Monday’s announcement, Orsted had already acknowledged an impairment of DKr3.5bn on the plummeting book value of its seabed leases off the coasts of New Jersey, Maryland, and Delaware, “which reflect prevailing market uncertainties among other factors” – which probably meant that Trump’s decree action is already priced in up to a certain degree.

Nipper also said that the company doesn’t “want to speculate on” the possible imposition by Trump on trade tariffs, but assured that this, while having a negative impact, “would not be at a very material level” for Orsted.

The developer has also secured vessel ability despite the expected delayed commissioning date of Sunrise Wind in the second half of 2027, but the CEO said “at this point, we are not concerned that there is a risk of vessels becoming a critical factor for the execution of the project.”

“With the knowledge we have today, we have a very good confidence that we can complete the project we have,” he said.