Orsted counts Q1 2022 cost of delayed commissioning at 1.3-GW Hornsea Two

Delayed commissioning at the 1.3-GW Hornsea Two offshore wind farm off the UK's Yorkshire coast has led to a DKK1.6 billion ($230 million) hedging loss, Danish developer Orsted said in a first quarter 2022 results statement April 29.

With UK spot power prices averaging GBP181.72/MWh April to date, according to data from S&P Global Commodity Insights, any outage is costly to a generator, not least one seeking to ramp up with the largest offshore wind farm in the world.

While all foundations, array cables, and wind turbines have now been installed, "the commissioning of the individual wind turbines has been progressing slower, and the ramp-up profile has been delayed compared to our internal expectations at year-end," Orsted said.

It was waiting for all wind turbines to pass final tests before commissioning "expectedly during summer," it said.

High power prices in Orsted's combined heat and power business served to offset the hedging loss, Orsted said, announcing group-level Q1 2022 EBITDA up 94% year on year to DKK9.4 billion.

Group offshore wind output was flat on the year at 4.5 TWh for the period, with the sale of 50% of Borssele 1 & 2 in May 2021 and higher curtailments in Germany in Q1 2022 offsetting higher wind speeds and ramp-up at Hornsea Two.

Wind speeds averaged 11.3 meters per second in Q1 2022, up from 10.5 m/s for Q1 2021, with wind farm availability of 95% in line with last year.

Meanwhile, generation from Orsted's US-based onshore wind business almost doubled to 3.2 TWh, with wind speeds averaging 7.7 m/s, in line with a normal year.

In Orsted's bioenergy and thermal cogeneration business, heat generation fell 17% to 3.2 TWh and power 5% to 2.1 TWh in Q1 2022 due to warmer weather, partly offset by higher condensing power generation due to higher prices.

Nevertheless, revenue in this segment rose 106% year on year to DKK14.47 billion, reflecting an average Danish market power price up 208% on the year to Eur151.10/MWh.