Ørsted Reshuffling Exec Team Amid ‘Challenging Business Environment’ in the Industry

Business & Finance

November 14, 2023, by Adrijana Buljan

Ørsted’s Chief Financial Officer (CFO) and Chief Operating Officer (COO) are leaving the company, and with immediate effect, as a result of “a challenging and volatile business environment” in the industry, according to the offshore wind major. Ørsted is already head-hunting for the new CFO and COO.

Daniel Lerup and Richard Hunter, Ørsted’s now-former CFO and COO, respectively, are stepping down by mutual agreement, according to Ørsted, which expects to name a new CFO and a new COO “as soon as possible in 2024.”

“Ørsted, along with the rest of the industry, is experiencing a challenging and volatile business environment. Therefore, the Board of Directors and I have agreed with our current CFO and COO that we need new and different capabilities to lead the Finance and EPC & Operations functions to strengthen Ørsted’s journey into the future. I would like to thank both Daniel Lerup and Richard Hunter for their contributions to Ørsted. I’ve enjoyed working with both of them for the past years and wish them all the best with their new endeavours,” said Mads Nipper, Group President and CEO of Ørsted.

In the offshore wind industry, the company has witnessed a few setbacks lately, primarily in the US.

As reported at the beginning of this month, Ørsted recognised impairment losses of DKK 28.4 billion (about EUR 3.8 billion) in the first nine months of 2023, the majority of which relate to the Ocean Wind 1 offshore wind project in New Jersey.

The company said the impairment losses were due to adverse impacts relating to supply chain delays, increased interest rates, and the lack of an Offshore Wind Renewable Energy Credit (OREC) adjustment on Sunrise Wind.

Ørsted abandoned both its Ocean Wind projects, even though Ocean Wind 1 had already entered the construction stage.

While the company is moving forward with the investment in the Revolution Wind project (Rhode Island and Connecticut’s first utility-scale offshore wind farm) and is still keeping its plan for the Sunrise Wind offshore wind farm in New York alive, the latter is still in jeopardy of also being cancelled if the current market conditions continue.

The offshore wind farm that Ørsted currently has under construction in Taiwan is also facing a delay in completion amid supply chain bottlenecks and vessel availability.

On 14 November, the same day that Ørsted announced its CFO and COO were stepping down, Norway’s Bonheur, informed that Ørsted decided to exit the offshore wind partnership with its wholly owned subsidiary Fred. Olsen Seawind and Hafslund in Norway.

“Ørsted have informed us that due to a prioritisation of investments in the portfolio they will withdraw from pursuing participation in offshore wind developments in Norway, and therefore their participation in the partnership will discontinue,” Bonheur said in a statement.

As for the two now vacant positions in Ørsted’s executive management team, the company has filled them in the interim, with Rasmus Errboe, currently CEO of Region Europe and Executive Vice President at Ørsted, serving as interim CFO and member of the Executive Board.

“Together with the Finance team and the Group Executive Team, Rasmus Errboe will lead the work on supporting Ørsted’s capital structure and long-term commitment to its credit rating,” the company stated in a press release on 14 November.

Andrew Brown, a member of Ørsted’s Board of Directors, has been appointed interim COO and member of the Group Executive Team, expectedly until 1 March 2024.

“Together with the EPC & Operations team, Andrew Brown will ensure a continued focus on managing the delivery of our EPC projects while also further advancing and implementing a strengthened project management and supply chain strategy to reflect anticipated industry developments,” Ørsted says.