The head of Ørsted, the global offshore wind leader, has delivered a long-awaited verdict to the industry at Norway’s ONS Energy Conference: “Costs have stabilised, and the sector has reached a turning point.”
For the European offshore wind industry, which has been reeling from a two-year “cost storm”, the announcement came as a decisive signal of recovery.
From industry front-runner to its darkest hour
Widely recognised as the undisputed global leader in offshore wind, Ørsted originated as a Danish oil and gas company before making a decisive strategic pivot: it divested all fossil fuel assets entirely to become the world’s pure-play green energy major.
Yet even this industry giant was pushed to the brink of survival in 2022–2023. The downturn was driven by surging global prices for raw materials including steel and copper, compounded by aggressive interest rate hikes from European and US central banks that sent financing costs soaring for these capital-intensive projects. Widespread supply chain disruptions further pushed costs completely out of control.
The most severe setback came when Ørsted was forced to cancel two large-scale offshore wind projects in the US, booking billions of dollars in write-downs that ultimately led to the departure of its former CEO. In short: the industry was under unprecedented strain, and even the largest players could not escape the pressure.
Drastic turnaround: the new CEO’s three-pronged stabilisation plan
To steady the business, newly appointed CEO Rasmus Errboe launched sweeping restructuring measures to stem losses. At the conference, he laid out the company’s three-pillar turnaround strategy:
Workforce restructuring: Around 2,000 jobs will be cut to streamline the organisational structure and reduce operating costs.
Capital replenishment: A 100 billion Danish krone capital raise to repair its balance sheet and position the company for recovery.
Non-core divestment: Divesting its European onshore wind business to focus entirely on core operations.
The strategic shift is clear: Ørsted announced that going forward, it will focus exclusively on fixed-bottom offshore wind.
Is the turning point truly here?
Rasmus Errboe’s confidence in declaring a “turning point” rests on three distinct signals:
1. Costs have finally stabilised
The worst of the inflationary surge appears to have passed, and supply chains are normalising, making the return on investment for wind projects predictable once again.
2. A wave of policy support is incoming
The EU has set an ambitious target of 300 GW of offshore wind capacity by 2050 – up from just 38 GW today. This means Europe will need to deploy a massive volume of offshore wind turbines over the coming decades. More critically, markets including Denmark, the UK, Germany, Belgium and the Netherlands are set to launch new offshore wind tender rounds within the next year, expanding the overall project pipeline.
3. State backing restores market confidence
As a publicly listed company with majority state ownership, the Danish government retains a 50% controlling stake in Ørsted. It is also supported by Norwegian energy major Equinor, which holds a nearly 10% stake. Backed by state capital, Ørsted’s financing costs are significantly lower than those of purely private operators.
Ørsted’s recovery is in many ways a microcosm of Europe’s broader energy transition. From betting heavily on offshore wind, to being pushed to the brink by cost pressures, to now seeing light at the end of the tunnel – Europe is demonstrating through tangible investment and policy commitment that the darkest period for offshore wind is over, and the golden age of fixed-bottom offshore wind is set to return.
