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Orsted CEO Nipper says offshore wind ‘dark clouds gather’ amid soaring finance costs

Orsted CEO Mads Nipper.

Posted on September 20, 2023

Orsted CEO Mads Nipper said “we’ve seen dark clouds gather” over the offshore wind sector and warned the price of green power will need to rise, but predicted that “we will bring it back down”, it was reported.

The Danish group’s boss also told New York Climate Week that a rise of interest rates is having “a very dramatic effect on renewables, because the fuel of the renewable industry is capital.

“We don’t need gas or oil or coal. It’s capital and that overnight has become significantly more expensive,” Nipper said, Reuters reported.

Global offshore wind pioneer Orsted has seen the business case for its projects challenged globally by rising cost of finance, and supply chain inflation and bottlenecks.

The company in August warned of $2.3bn in impairments on its US projects and has warned that a “walk away scenario” is not off the table unless conditions change.

Nipper reportedly told the New York event that meeting President Joe Biden’s target for 30GW of offshore wind by 2030 was still possible though not easy.

Recharge reported that a clutch of governors of key US offshore wind states wrote to Biden warning that the first wave of American projects was at “risk of failing” without government action to help, particularly by ensuring they can benefit fully from federal renewable energy incentives.

US states have contracted some 12GW of offshore wind capacity, but two thirds of this is jeopardised by inflation and rising interest rates.


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