Solar and Wind

On 31 October 2023 Ørsted, the Danish company that had turned itself from a North Sea oil, gas and coal utility into the world's largest offshore wind developer outside China, announced that it was cancelling Ocean Wind 1 and 2, two projects off southern New Jersey with about 2.2 GW of capacity between them. Ocean Wind 1, about 1,100 MW, had won New Jersey's offshore renewable energy certificates in June 2019 at a levelised price reported at about $98/MWh. In 2019 the US ten-year Treasury yield had been about 1.5%. By October 2023 it was about 4.5–5%. Steel, turbines, installation vessels and monopiles had all become dearer and slower to obtain, and the contract price was fixed. On 12 October New York's commission had refused developers' petitions to reprice their contracts; New Jersey had passed a law in July 2023 letting Ørsted keep federal tax-credit benefits rather than pass them to ratepayers, but it was not enough. The same day it cancelled Ocean Wind, Ørsted took the final investment decision on Revolution Wind, off Rhode Island, and reported about DKK 28.4 billion of impairments for the year across its US offshore portfolio (company). Its share price fell to the lowest since its 2016 listing (reported).

What followed was a slow reckoning. In February 2024 Ørsted cut its 2030 target from about 50 GW to about 35–38 GW, suspended its dividend for 2023–25 and announced job cuts. Its chief executive, Mads Nipper, was replaced by Rasmus Errboe from 1 February 2025. It discontinued Hornsea 4, a ~2.4 GW project in the British North Sea, in May 2025. Then US federal permission moved against it. The Interior Department ordered work stopped on Revolution Wind on 22 August 2025, when the project was about 80% built; a court allowed work to resume, and after a further order against Revolution and Sunrise Wind on 22 December 2025 a district court issued a preliminary injunction on 12 January 2026. To fund itself through all of this Ørsted raised about DKK 60 billion in a rights issue completed in October 2025, and sold half of Hornsea 3 to Apollo for about DKK 39 billion (company, reported). By about 18 September 2026 all 65 of Revolution Wind's turbines were installed and it had been delivering power since the first quarter, but commercial operation had not been declared.

Ørsted had the right technology, a supportive state shareholder and contracts with American states. It had bid those contracts at the bottom of an interest-rate cycle, on terms that left it carrying the cost of the rise. This chapter explains the economics of solar and wind, why their cost is mostly a cost of capital, how China's manufacturing glut destroyed profits across the solar chain, and why First Solar bet differently.