Equinor takes $300m impairment on US offshore projects

Posted on 02 November 2023

The three wind farms had a petition to increase offtake prices rejected recently

Equinor has recognised a $300m impairment on its US offshore wind projects.

According to the group’s third quarter report, the three projects, 1230MW Beacon Wind, 816MW Empire Wind 1 and 1260MW Empire Wind 2, which are being developed alongside bp on the US Northeast Coast, were negatively impacted by cost inflation and supply chain constraints.

In addition, the New York Public Service Commission recently rejected petitions from Equinor and other companies to increase the prices previously agreed in its offtake agreements with the state.

Equinor stated that it is currently assessing the implications of the decision for its projects.

The company saw a drop in its net operating income in the third quarter and the first nine months of 2023 – down to $7.45bn in the third quarter of this year compared to $26bn in the third quarter of 2022, and $27bn in the first nine month of this year compared to $62.2 compared to the same period of last year.

Equinor said that the $300m impairment contributed to the reduction in net operating income. In addition, higher development costs experienced in 2023 and a divestment gain recognised in the first nine months of 2022 were also to blame.

The company’s third-quarter results showed that power production from renewable energy sources was 373GWh in the quarter, up from 294 GWh in the same quarter last year.

The increase was driven by higher production on UK wind farms and new production from onshore renewables in Poland, as well as the floating wind farm Hywind Tampen in full production

Anders Opedal, president and CEO of Equinor ASA: ““We continue our transition, with first power from Dogger Bank in the UK - the world’s largest offshore wind farm, further expanding in onshore renewables in Brazil and Poland, and investing in the Bayou Bend CCS project in the US.”