Monopiling on: Ørsted provides updates on Revolution Wind after construction snag

The first turbine istalled at Revolution Wind. Courtesy: Kate Ciembronowicz/Ørsted

A challenge installing an offshore substation monopile at Revolution Wind will cost its developer Ørsted some cash and has caused the company to reassess risks associated with the project in its latest earnings report.

In Ørsted’s Q3 investor presentation, the world’s leading offshore wind developer says it has so far successfully installed 52 turbine foundations and 9 turbines at Revolution Wind, its 704-megawatt (MW) project being built about five miles south of the Rhode Island coast and 32 miles southeast of Connecticut.

“However, we have experienced challenges primarily relating to the piling of one of the offshore substation monopiles, which will expectedly lead to higher project costs,” the report reads in part. “We have increased our contingencies accordingly.”

Ørsted installed the project’s first monopile foundation in May and its first wind turbine in September. Despite the recent snag and its extra costs, the construction of Revolution Wind’s associated onshore substation is still progressing according to an updated schedule laid out in August, when Ørsted announced a timeline delay pushing the project’s targeted operational date into 2026, rather than 2025 as initially proposed. The onshore substation is on a decommissioned military landfill site where permitting and site preparation have proven more challenging than anticipated. Its delayed construction will result in knock-on impacts on costs and progress, according to Ørsted, including the additional costs of extending the installation period.

The onshore cable route for Revolution Wind. Courtesy: Ørsted

The developer reported impairments for the first nine months of 2024 totaling DKK 3.4 billion, equal to nearly $500 million, mainly related to deciding to kill its FlagshipONE project (DKK 1.5 billion), and from construction delay of the onshore substation, installation of an offshore substation monopile, additional contingency due to higher risk assessment, and market prices at Revolution Wind (DKK 3.8 billion).

Revolution Wind, set to be the United States’ first multi-state offshore wind farm, is adjacent to Ørsted’s recently completed South Fork Wind, the country’s first utility-scale offshore wind farm. Once completed, Revolution Wind will utilize 65 Siemens Gamesa turbines (the same 11 MW model used at South Fork Wind) to generate 400 MW of clean wind power for Rhode Island and 304 MW for Connecticut.

In July, Ørsted marked the groundbreaking for another neighboring project, Sunrise Wind, set to be New York’s largest offshore endeavor. Ørsted’s reported Q3 losses were partly offset by a reversal on Sunrise Wind, which was recently awarded a higher OREC (Offshore Renewable Energy Certificate) by the State of New York. Construction at Sunrise Wind is progressing on a tight schedule but in accordance with Ørsted’s revised plan, and commissioning is expected at the end of 2026 or early 2027.

The developer reported net impairments of DKK .3 billion in Q3 2024 related to its U.S. portfolio, where losses were partially offset by the feds dropping interest rates by 50 basis points. In total, Ørsted’s announced delay of Revolution Wind has resulted in a further impairment of DKK 1.7 billion in the quarter, exclusive of the positive impact of the lower interest rates.

Eversource Energy was a 50/50 partner with Ørsted on South Fork Wind and Revolution Wind until it recently sold its stake in the projects to Global Infrastructure Partners (GIP). Eversource also offloaded its 50% ownership share in the 924 MW Sunrise Wind project to Ørsted in July.

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