Projects, operations on track but future disruption possible: Orsted

London — Construction of Orsted's generation projects remain on schedule and existing capacity is fully operational, the Danish renewable energy company said Wednesday in a coronavirus update.

Extended travel and quarantine restrictions, however, could impact Orsted's ability to keep site operations and service operation vessels fully manned.

"This may over time impact the availability of wind farms. However, we see no COVID-19-related impact on availability so far," it said.

Travel restrictions and quarantines could also impact suppliers' delivery of components to projects currently under construction, it said.

"Our construction projects continue to progress according to plan and with embedded contingencies that, to a certain extent, can mitigate potential delays. And currently, we do not see any permits, consents, tax credits, offtake agreements, etc., in relation to our construction projects being at risk due to delays," it said.

Orsted is Europe's leading offshore wind generator with 6.8 GW of capacity in UK, Danish and Germany waters, as well as 1 GW of onshore wind in the US and 2 GW of thermal plant in Denmark.

It is building the 752 MW Borssele 1 & 2 wind farm in Dutch waters, the 1.386 GW Hornsea 2 offshore wind farm in the UK, and the 900 MW Changhua 1 & 2a offshore wind farm in Taiwan. It also has 670 MW of US onshore wind capacity in construction.

"Our asset base is fully operational at availability rates within the normal range, we continue to meet our heating and electricity supply obligations and our construction projects are all progressing according to plans," the company said.

Its hedging program meant it was "largely shielded in the short to medium term from the current extreme market volatility," and it saw limited risk of impacts from falling gas and power prices and volatile currency rates.

Construction programs would be supported by a DKK 30 billion ($4.35 billion) liquidity reserve ensuring work could continue through 2020 and 2021 without further funding, it said.

Orsted's largely biomass-fired combined heat and power plants in Denmark also remained fully operational with stable fuel supply logistics, it said. As the end of the heating season was in sight, there was little risk of Orsted not being able to honor its heating supply commitments.

Power demand in Orsted's core markets had been much less affected by the crisis than in, for instance, Italy, "and we cannot detect any changed pattern in the occurrence of negative wholesale power prices."

"In a scenario with more subdued power demand, we could potentially see an increase in the number of hours with negative prices, but as we are partly compensated, we assess the overall impact to be limited," it said.

The company said government tenders and auctions of future renewable energy capacity could be impacted by delays.