Danish energy giant Ørsted has canceled plans for the Hornsea 4 offshore wind farm, dealing a major blow to the UK’s renewable energy ambitions.

Hornsea 4, at a massive 2.4 gigawatts (GW), would have become one of the largest offshore wind farms in the world, generating enough clean electricity to power over 1 million UK homes. But Ørsted announced that it’s abandoning the project “in its current form.”

“The adverse macroeconomic developments, continued supply chain challenges, and increased execution, market, and operational risks have eroded the value creation,” said Rasmus Errboe, group president and CEO of Ørsted.

Reuters reported that Ørsted’s cancellation of Hornsea 4 would result in a projected loss of up to 5.5 billion Danish crowns ($837.85 million) in breakaway fees and asset write-downs. The company’s market value has declined by 80% since its peak in 2021.

The cancellation highlights significant challenges currently facing offshore wind development in Europe, particularly in the UK. The combination of higher material costs, inflation, and global financial instability has made large-scale renewable projects increasingly difficult to finance and complete.

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Ørsted’s decision is a significant setback to the UK’s energy transition goals. The UK currently has around 15 GW of offshore wind, and Hornsea 4’s size would have provided almost 7% of the additional capacity needed for the UK’s 50 GW by 2030 target, according to The Times. Losing this immense project off the Yorkshire coast could hamper the UK’s pace of reducing dependency on fossil fuels, especially amid volatile global energy markets.

The UK government reiterated its commitment to renewable energy, promising to work closely with industry leaders to overcome financial and logistical hurdles. Energy Secretary Ed Miliband told reporters in Norway that the UK is “still committed to working with Orsted to seek to make Hornsea 4 happen by 2030.”

Ørsted says it remains committed to its other UK-based projects, including the Hornsea 3 wind farm, which is expected to generate around 2.9 GW once completed at the end of 2027. Despite the challenges, the company emphasized its ongoing commitment to the British renewable market, pointing to the critical need for policy support and economic stability to ensure future developments.

Yet, the cancellation of Hornsea 4 demonstrates that even flagship renewable projects are vulnerable in the face of economic pressures and global uncertainties, which have been heightened under the Trump administration in the US.

Read more: The world’s single-largest wind farm gets the green light

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