Hornsea 4 cancellation adds to uncertainty
Ørsted today announced it is cancelling development of the 2.4GW Hornsea 4 project off the UK due to increased supply chain costs, higher interest rates, and greater construction and operational risk (FID was expected later in 2025). The cancellation adds to uncertainty for the offshore wind services industry and overall project profitability within offshore wind. No installation contracts for Hornsea 4 had been disclosed yet, but with Cadeler responsible for foundations and half the turbines on Hornsea 3 (2026–2027e execution), and having a long-term frame agreement with Ørsted for a foundation installation vessel from 2027, we had expected Cadeler to be a frontrunner for installation work on Hornsea 4, and consider today’s cancellation on the downside for Cadeler. As regards the vessel that looked set to be deployed at Hornsea 4, we expect there to be decent termination protection for Cadeler. Also, the vessel could potentially be used on other Ørsted projects or even for O&M work on turbines thanks to its ability to be converted to turbines and relatively attractive dayrate. Hence, despite likely decent protections and alternatives for the vessel involved, we believe the main concern among investors relates to the top-down impact on the installation industry and future projects given Ørsted is walking away from the project.
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