Ocean Wind 2 Offshore Wind Farm

United States
Dormant
1148 MW Capacity
07 Feb 2024: Taken from Capital Markets Day update Feb 2024: OceanWind 1 Context: Project had no revenue inflation indexing, but was being developed in a context of increasing interest rates and significantly increasing CapEx inflation, which was 3x to 4x as high as consumer price inflation, and even higher in an immature offshore wind market like the U.S., returns were therefore already under pressure. Project had lost most of the float in its schedule, but Ørsted had chosen to continue to mature the project and to commit capital with the intent to reach the committed COD date. In hindsight was not the right decision to commit such significant capital to a pre-FID project. With intent to qualify for the tax credits, Ørsted made itself dependent on the immature supply chain in the U.S. market, and was deeply engaged in building new facilities. Its commitments were part of the business case for ensuring that new build vessels could reach FID.   Orsted felt comfortable that local suppliers were on track, but progress was slow due to a lack of qualified labor, difficulties ramping up and other challenges. Overall, and especially over the summer and early fall 2023, there was a number of delays and suppliers that failed to live up to the commitments, meaning the project was very badly hit.  Following vessel delays Orsted then found itself unable to source backup capacity for installing in 2025. By the time this was known it was too late, meaning the project would face such a delay it would have to recontract most of the CapEx at even higher rates. This ultimately led to the economically rational decision to seize development. Additionally, there were local construction permits turned out to be more challenging than assumed, plus a delay on the air permit for the project, which again post additional uncertainty.  At the time of the cancellation decision, it was also not clear what additional tax credit the project would qualify for. Learnings based on the series of events with Ocean Wind 1:  - Significant additional focus on supply chain contingency planning - scenario planning of what material risks could occur, at the same time. This is in addition to existing project risk registers of over 100 risk identified, quantified with mitigations. - Consider outcomes of concurrent risks, notably those with critical dependencies. - Proactively secure capacity, especially installation capacity, well ahead of time. That is an "absolute key learning".  - In newer markets, or when new supply chain capacity is being built, work even closer with the vessel yards, with the manufacturing facilities and verify they are following construction time lines. If not, can we help? Or do more proactive contingency planning? - After a period with very volatile environments prioritize only the inflation indexed contracts, especially in markets like the U.S., where there's a long time from award to actually FID. In U.K. (which has inflation protection) there's a much shorter time line between award and FID (i.e. lower risks). - Significantly higher scrutiny of pre-FID commitments - Orsted will not again allow pre-FID CAPEX at the significant levels seen at Ocean Wind 1. This learning was already carried into Ocean Wind 2 - Have all critical local permits in place before taking FID or undertaking capital commitments. - Prioritize projects with a flexibility on the time line for the COD, as this provides additional flexibility in how the company can commit CapEx. This is also better for the power offtaker, as its better to deliver a year later than not at all. - Stage-gate reviews - expert teams from outside of the project team scrutinize the project ahead of stage gates to ensure the project is reigourously challenged before committing additional resources. This could also include external company reviews for select projects. Mitigating actions are then pushed for if needed.
4C Offshore | Location Map: Lat(39.066) Lon(-74.379)
General Information
Name
Ocean Wind 2
Other Names
Lease OCS-A 0498
Country
United States
Development Status
Dormant
Category or Round
Unlock with free limited access
Region
Unlock with free limited access
Comments
Unlock with free limited access
Website
Unlock with free limited access
Developers/Owners/Operators

Developer

Ørsted US Offshore Wind

Ørsted US Offshore Wind

Operator

Ørsted US Offshore Wind

Ørsted US Offshore Wind

Owner

Ørsted US Offshore Wind

Ørsted US Offshore Wind

Key Dates
Costs
Stated Project Cost
Gain full access with Premium membership
Revenue Mechanism
Gain full access with Premium membership
Revenue Details
Gain full access with Premium membership
Revenue
USD 98.49/MWh (EUR 90.02/MWh)

Gain Unmatched Insight into the Global Offshore Wind & Transmission Markets

Want to stay ahead in the fast-paced offshore wind industry?

Access real-time insights on wind farms, infrastructure, cables, ports, and vessels to stay informed on the latest trends. With 4C Offshore's intelligence, you'll have the data and analysis you need to make smart, timely decisions.

Why 4C Offshore?

Our platform delivers cost-effectve, industry-leading intelligence with deep data coverage and expert tools to support your decisions.

Access Options

  • Explorer Insights (Free): Personalize alerts, use search tools, and access key data.
  • Premium (Full Access): Unlock unlimited interactive tools, reports, updates, and the full 4C Offshore dashboard.

Learn how 4C Offshore can transform your business - register now or inquire below

Power & Turbines
Location & Environment
Sea Name
North Atlantic Ocean
Latitude
39.065656°
Longitude
Gain full access with Premium membership
Area
Unlock with free limited access
Depth Range (Chart Datum)
Gain full access with Premium membership
Depth Range (Stated by Developer)
Gain full access with Premium membership
Distance from Shore (Developer)
Unlock with free limited access
Distance from Shore (Computed)
Gain full access with Premium membership
Ports
Grid
Number of Offshore Platform(s)
Shared Platform Type
Gain full access with Premium membership
Grid Connection Point
Unlock with free limited access
Cable Landing Point
Gain full access with Premium membership
Export Cables (AC & DC)
Number of Export Cables (AC)
Unlock with free limited access
Average Length per Cable (AC)
Gain full access with Premium membership
Additional Requirements (AC)
Gain full access with Premium membership
Nominal Voltage (AC)
Gain full access with Premium membership
Number of Export Cables (DC)
Gain full access with Premium membership
Average Length per Cable (DC)
Unlock with free limited access
Additional Requirements (DC)
Gain full access with Premium membership
Nominal Voltage (DC)
Gain full access with Premium membership
Array Cables
Onshore Cables

Free account registration

Register today at no cost to our Explorer Insights subscription and access more of the 4C Offshore database and additional functionality such as tailored notifications, enhanced search capabilities.

Understand the market and make better decisions with access to the entire 4C Offshore database through our Premium subscription, providing crucial marketing intelligence across all major segments of the offshore renewable energy sector.

Premium users have unlimited access to a comprehensive dashboard of options via our dedicated web app with exclusive access to online and offline databases, analysis, reports, webinars, newsletters, interactive online tools, maps and more. Enquire today by selecting the “Premium” tab above.

Account Usage
Main Interest
I have read the privacy policy. and agree to the terms of service.

Ask us about our premium subscription

Gain access to the 4C Offshore web app and dashboard, the powerful intelligence tool fueled by TGS offshore global wind market data and insights.

Full, unlimited access to exclusive offshore data and insight to fuel your wind development decisions.

Discover insights through detailed graphs and charts to help you calculate market shares and explore ownership stakes and costs.

Main Interest
I have read the privacy policy. and agree to the terms of service.