Ørsted’s Financial Situation: Causes and Solutions

This week the Uptime crew looks at Ørsted's current financial
state, reviewing recent difficulties and the pathway forward. What
factor have offshore cancellations played? Is the American offshore
environment too difficult? Will they source Chinese turbines? Who
are their competitors? And our wind farm of the week is Cedar
Springs Wind Farm in Wyoming! Register for the AMI Wind Turbine
Blades Event! Sign up now for Uptime Tech News, our weekly email
update on all things wind technology. This episode is sponsored
by Weather Guard Lightning Tech. Learn more about Weather
Guard's StrikeTape Wind Turbine LPS retrofit. Follow the
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YouTube channel here. Have a question we can answer on the
show? Email us! Pardalote Consulting -
https://www.pardaloteconsulting.comWeather Guard Lightning Tech -
www.weatherguardwind.comIntelstor - https://www.intelstor.com Allen
Hall: I just want to know when I go to Copenhagen next time are
they going to be shooting me with squirt guns like they're doing in
Barcelona? You're not a tourist there. You're on business. Am I? I
like Copenhagen. It's quite nice. Rosemary tells me it's a good
place to hang out and the restaurants are quite good. There's
Michelin restaurants all over the place. Rosemary Barnes: I lived
in Denmark for five years and I went to Copenhagen once in that
time. It's It is a cool, it's a cool city. Europe's full of cool
cities. It's so expensive to get from Western Denmark across to
Copenhagen. You have to, yeah, it's like there's a bridge you have
to pass each way that's like a hundred dollars for the just in one,
one toll. Yeah and I was, it was much easier for me to get to
Hamburg or Berlin. So I usually went there when I Had a need for
big city stuff. Also the I really liked seeing music events,
concerts and stuff like that, and Germany is much, much better for
that than Denmark. Allen Hall: Can somebody say something nice
about Denmark? Rosemary Barnes: Denmark doesn't need anyone to say
anything nice about them. Denmark has the best PR out of any
country in the world. Like how Facebook whatever? And it's just,
like little reels about some amazing thing in Denmark. It's just.
You get bombarded with it. Joel Saxum: Have you ever seen the
Danish plug? It's actually like the power plug. It's actually a
smiley face. That's how smiley they are. Rosemary Barnes: Everyone
knows the Australian plugs are the best design though. Joel Saxum:
Are they like the English? Rosemary Barnes: No, they're different.
And they just it's just so secure, like you got angled pins that
you plug it in and it is. In, none of these, the US ones with the
parallel things where it's always just like sagging out a little
bit with live, live wires, just just there, it, ugh, change it.
Wait. And that's why you can only have 110 volts. It's survival.
Have to lower your voltage so our kids can survive it. Allen Hall:
The reason we have 110 volts is because we have the ability to mine
copper. And we had the wealth to put in a little bit extra copper
everywhere else in the United States versus Europe. Europe's at 220
or whatever it is, 221 because they have less access to copper,
it's more expensive. Rosemary Barnes: So you're lazy and
inefficient is what you're saying? Allen Hall: No, we just use the
resources that are available. I'm Allen Hall and I'll be joined by
the rest of the Uptime hosts after these news headlines. Brisbane
based power generator Renewable Energy Partners has proposed a 5
gigawatt wind power complex in Queensland, Australia. The Bogunda
wind farm is planned to be installed in phases. The initial phase
is expected to be 2 gigawatts, with the capacity to generate
electricity for 200, 000 homes annually. The project will be
connected to the proposed CopperString 2. 0 transmission link.
Renewable Energy Partners aims to bring the initial 2 gigawatt
portion online by the end of 2030. Vestas is restructuring its
operations. The company will cut approximately 54 positions at its
factory in Ringskobing, Denmark, while expanding production in
Colorado in the USA. This move is in response to increased demand
for its V 163 onshore turbines in the American market. After
adjustments, about 350 employees are expected to remain at the
Ringskobing factory. Ørsted reported impairment losses of 3. 9
billion Danish crowns in the second quarter of 2024. The losses
were partly due to a delay in the construction of its 704 megawatt
revolution wind project off of Rhode Island and Connecticut. The
company has pushed back the start of commercial operations for this
project from 2025 to 2026. Despite these challenges, Orr said beat
analysts expectations with a 59 percent rise in second quarter
profits before interest tax depreciation and amateurization. Orset
has also stated that while it currently has no Chinese turbines in
its project pipeline, it does not rule out buying turbines or
technology from China in the future. The company is monitoring
developments in the European wind turbine market where Chinese
manufacturers have Been gaining momentum, Snipper mentioned that
the company is already using Chinese components and steel for its
projects. Netsco, a U. S. based naval architecture firm, is
finalizing an agreement to build and operate a Jones Act compliant
feeder vessel for offshore wind turbine installations. The new
feeder barge design incorporates dynamic positioning, Anti roll
motion technology and a specialized fendering system to address
current operational challenges. The vessel is expected to be ready
within 18 to 24 months after contract finalization. And Ibudrola,
through its U. S. subsidiary Avangrid, has surpassed 9, 000
megawatts of installed wind and solar renewable capacity In the
United States, this milestone enables the company to supply
sustainable energy to more than 2. 3 million U. S. families.
Iberdrola's portfolio includes over 75 projects in 22 states with
more than 8, 000 megawatts of wind capacity and around 1, 000
megawatts of solar power. That's this week's top news stories.
After the break, I'll be joined by my co host, renewable energy
expert and founder of Pardalote Consulting, Rosemary Barnes. CEO
and founder of IntelStor, Phil Totaro, and the Chief Commercial
Officer of Weather Guard, Joel Saxum. Mark your calendars for AMI's
Winter in Blades conference happening October 2nd and 3rd in
historic Boston, Massachusetts. This two day event, which is
similar to the well established edition in Europe, We'll bring
together the whole blade value chain to examine market outlook,
innovations in blade materials, design, manufacturing, testing, and
lifecycle management with a special focus on the North America
market. Gain insights from experts from Vestas, Along with
scientists and engineers from the National Renewable Energy
Laboratory and the Oak Ridge National Laboratory. Plan your trip to
Boston this fall by visiting the link in the show notes or just
Google 2024 Blades Boston. They always say when Orsted sneezes the
rest of the energy world gets a cold. And right now, Orsted is
coughing and wheezing pretty good. If you're looking at the
financial numbers from Orsted, they booked a 3. 9 billion Danish
crowns, which is about 575 million in an impairment loss in Q2. So
that's a lot of money. And part of that is the revolution wind
project in the States is being delayed due to soil contamination at
the onshore site, which man can Orsted not win. And then that sort
of had some other cascading effects. Shares of Orsted are down
somewhere around 8%. And if you look at the last four years, three,
four years, it's roughly at one third of its peak in like the
beginning of 2021. Now, even with those losses, they beat
expectations with a 59 percent rise in profits. Even when things
are looking down, Orson has some positive news. And it looks like
guys, Orsted is cutting back so they're not pushing on some of the
more perimeter projects that they had, like this flagship one, the
e methanol project for green fuels, that one's been slowed down,
and a bunch of other Orsted related items are getting slowed. I
look at Orsted as one of the crown jewels in renewable energy, and
if Orsted is having this much trouble today, What are they about to
do with it? Are they really going to try to be, work closer to
home, step out of America a little bit? Are they. Going to
restructure. How does this look? Particularly in light of the
cancellations they had, I think it was earlier this year Joel? On
the East Coast. Joel Saxum: Yeah, earlier this year. I think that
you just got to pull it in a little bit, to be honest with you. And
we thought they were going to do a little bit more of that when
they had the issues with the offshore wind plays in the U. S. Was
just rain it back on the difficult projects. Which you can see
right now with that the power to X type stuff or the sorry, the e
methanol project that they had just canceled is that's not normally
from their core business. Their core businesses for a long time has
been offshore wind in the North Atlantic. They, you could, I could
see them pulling back a little bit more focusing on those things,
getting a little bit more healthy and then going out and trying
some other projects. Like you said, you've seen this, they're, they
pulled back from some of the things in the States but. Now going
forward, but then you see a revolution wind come full on
commissioning, pushed back to 2026. So now they're running into
some hurdles and some roadblocks around the world Allen Hall: is
because there's so much into the offshore piece and that is so
expensive compared to Joel Saxum: onshore. It's risky, right?
There's just a lot more capital at play. Rosemary rec or has
recommended the books how big things get done before.