Ørsted Halts Hornsea 4 Wind Farm Plans, Raising Concern Over UK’s 2030 Clean Energy Targets

In a significant blow to the UK’s renewable energy ambitions, Danish energy giant Ørsted has announced it will discontinue development of the 2.4 GW Hornsea 4 offshore wind farm "in its current form". The project, which would have powered over 2.6 million homes, was one of the largest planned offshore wind developments in the world.

Ørsted cited rising supply chain costs, higher interest rates, and escalating construction/operation risks as reasons for the decision, despite having secured a Contract for Difference (CfD) from the UK government in 2024. The news follows a similar cancellation in the offshore wind sector last year, with Vattenfall’s withdrawal from the Norfolk Boreas project due to inflation and financing challenges.

The cancellation is a major setback for the UK government’s goal to triple offshore wind and solar power generation and double onshore wind over the next 5 years. The Clean Power 2030 Action Plan noted that whilst all renewables deployment will be important, growth in offshore wind will be particularly critical. The outcome raises the stakes for the upcoming AR7 CfD auction, with recent consultations on potential reforms.

Ørsted has retained seabed rights, grid connection, and planning permissions for Hornsea 4, and will ‘evaluate options for future development’.

Rasmus Errboe, Group President and CEO of Ørsted said:

“The adverse macroeconomic developments, continued supply chain challenges, and increased execution, market and operational risks have eroded the value creation.”

“I’d like to emphasise that Ørsted continues to firmly believe in the long-term fundamentals of and value perspectives for offshore wind in the UK. We’ll keep the project rights for the Hornsea 4 project in our development portfolio, and we’ll seek to develop the project later in a way that is more value-creating for us and our shareholders.”

In response to the announcement, RenewableUK’s Deputy Chief Executive Jane Cooper said:

“Although it’s disappointing when a project is put on pause, the UK remains one of the best places in the world to build offshore wind farms, with a significant pipeline, clear ambitions for contracting large volumes through upcoming auctions and supply chain funding. The unique cost pressures faced by Hornsea 4 have led to a rethink on this particular project, and we need to do everything we can to keep a stable market for all other projects going forward.”

Energy UK CEO Dhara Vyas commented:

“The loss of such a big project will raise the stakes yet further for the forthcoming Contracts for Difference auction round, AR7. Whilst Orsted has been clear this is not a result of Government policy, with offshore wind playing such a critical role in our future energy ambitions it’s vital that the Government doubles down to ensure AR7 is a success.”