The 2.4 GW development off the Yorkshire coast, which secured a Contract for Difference (CfD) in Allocation Round 6 last September, is now officially on ice.
Ørsted says it will stop all spending and terminate supply chain contracts, effectively halting the project in its current form.
Despite nine months of active development and engagement with stakeholders, the company said that the financial case for Hornsea 4 no longer stacks up.
Supply chain inflation, interest rate hikes and risk around delivery timelines have all undermined confidence.
In a blunt assessment of the market, Group President and CEO Rasmus Errboe said:
“After careful consideration, we’ve decided to discontinue the development of the Hornsea 4 project in its current form.
“The adverse macroeconomic developments, continued supply chain challenges, and increased execution, market and operational risks have eroded the value creation.”
Ørsted will keep hold of its seabed rights, grid connection agreement and Development Consent Order, signalling that it may try to resurrect the project under different conditions in future.
“We’ll seek to develop the project later in a way that is more value-creating for us and our shareholders,” Errboe confirmed.
The company stressed that it remains committed to UK offshore wind and praised the government’s efforts to set a supportive policy framework.
But it made clear that it will only proceed with projects that offer strong returns. “Our capital allocation is based on a strict and value-focused approach,” Errboe said.
The decision will cost Ørsted between DKK 3.5 and 4.5 billion (£400–515 million) in breakaway charges in 2025.
The firm says it managed its capital exposure during the development phase carefully, keeping commitments “well below our threshold”.
The cancellation is a major blow to the UK’s offshore wind ambitions, particularly as Hornsea 4 was billed as one of the world’s largest planned offshore projects.
With supply chain pressures showing no sign of easing, Ørsted’s move could be a sign of more turbulence ahead for large-scale renewables.
