Orsted (DNNGY, Financial) just dropped a bombshell on investors, revealing a massive 12.1 billion Danish crown ($1.7 billion) impairment in Q4. The culprit? Cost overruns and delays in its 924-megawatt Sunrise Wind project off Montauk, New York. Originally slated for an earlier debut, the project's commissioning has now been pushed to late 2027. Rising costs for critical components like monopile foundations and soaring U.S. financing expenses have only added fuel to the fire, with a 4.3 billion crown chunk of the impairment directly tied to this offshore wind initiative.
CEO Mads Nipper didn't sugarcoat the situation, calling the setbacks “very disappointing” but doubling down on the company's long-term commitment to the U.S. renewables market. And while the challenges in the young U.S. offshore wind industry are real, Orsted's preliminary 2024 EBITDA of 24.8 billion crowns shows the company isn't exactly on life support. Still, investors are left wondering how much more turbulence the company can weather as it bets big on clean energy in a complex, high-cost environment.
The Sunrise Wind saga isn't just Orsted's problem—it's a wake-up call for the entire renewable energy sector. Inflationary pressures, supply chain issues, and rising financing costs are proving to be formidable foes, even for industry leaders. For investors, the message is clear: the road to green energy dominance won't be smooth, but the long-term rewards could still justify the bumps along the way. All eyes are now on Orsted to see if it can turn the tide and keep its U.S. ambitions afloat.
