One of the UK’s most ambitious offshore wind projects has been shelved, as Danish energy firm Ørsted confirmed it will no longer proceed with the fourth phase of its Hornsea windfarm development off the Yorkshire coast.
The Hornsea 4 project, which had secured government approval in July 2023, was set to become one of the largest offshore windfarms in the country.
With plans for 180 turbines and a capacity of 2.6GW, it was expected to provide clean electricity to around one million homes.
However, Ørsted announced the decision to abandon the project citing escalating supply chain costs, increased interest rates, and greater risks during execution.
The company estimates it will incur losses between 3.5bn and 4.5bn Danish kroner (approximately £399m to £513m) as a result of halting the development.
Chief executive Rasmus Errboe explained to investors that the deteriorating economic conditions had undermined the project’s value, making it unviable in the current climate.
This is not the first setback for Ørsted. In late 2023, the company cancelled two large-scale wind projects off the north-east US coast, absorbing a £3bn loss and implementing significant job cuts.
These decisions are part of a broader trend within the global wind energy sector, which has been grappling with inflation, rising interest rates, and severe disruptions across the supply chain.
Despite these short-term headwinds, Ørsted remains optimistic about the future of offshore wind.
The company noted that growing global energy demand, increased focus on renewable energy affordability, and more supportive regulatory frameworks in several markets continue to underpin long-term industry growth.
The earlier phases of the Hornsea project remain in operation, with Hornsea 2 currently holding the title of the world’s most powerful offshore windfarm.
It produces enough electricity for over 1.4 million homes and spans 178 square miles of the North Sea.
The cancellation of Hornsea 4 follows a turbulent period for Ørsted, which triggered a major restructuring effort in 2024.
The company also suspended dividend payments for the 2023–2025 period in a bid to stabilise its finances, following an 80% decline in its market value since 2021.
Ørsted’s first-quarter results this year exceeded expectations, but the decision to cancel such a significant UK project signals ongoing volatility in the offshore renewables sector.
