Danish energy giant Orsted has increased its full-year earnings guidance for 2020 by Dkr1bn (€134m) to between Dkr16bn and Dkr17bn, excluding earnings from new partnership agreements.
The guidance increase is due to “updated assumptions” regarding the divestment of the transmission assets for the 1.2GW Hornsea 1 offshore wind farm off the east coast of England, Orsted said
Last month, UK energy regulator Ofgem announced that Diamond Transmissions Partners had been selected as the preferred bidder for the wind farm’s grid assets.
In the UK, a developer constructs transmission asset as part of the overall project and then subsequently divests the grid link.
Orsted said: “Following further progress in the divestment process, we have lowered our assumption regarding the preferred bidder’s expected return requirement on the transmission asset.”
The company said that the implication of this is twofold.
“A positive NPV impact on our own share of the transmission asset, as we will be paying lower than assumed tariffs going forward, and higher profit on the 50% share of the transmission asset we divest on behalf of our partner.
“The impact of the latter will be recognised in EBITDA in 2020, whereas the EBITDA impact on our own share of the asset will materialise over the lifetime of the asset.”
Meanwhile, in the US Orsted has opened a new offshore wind innovation hub at Providence in Rhode Island.
The hub will serve as a base for the company to explore the deployment of next-generation technologies to advance offshore wind deployment.