Will Hornsea 4 debacle open UK to Chinese turbines?

• Ørsted last week axed its 2.4GW Hornsea 4 offshore wind project
• The Danish utility blamed its Hornsea 4 decision on rising costs
• UK ministers are considering whether to allow Chinese turbines
• Machines from China could help developers reduce project costs

The more things change, the more they stay the same.

It is 2025 and again discussion about offshore wind in the UK is dominated by two big themes: unviable projects and Chinese turbines.

Last Thursday (7th May), Danish utility Ørsted revealed it was cancelling work on its 2.4GW Hornsea 4 offshore wind farm. The firm blamed the cancellation on the well-worn reasons of higher supply chain costs, increased interest rates and greater risks for projects in the construction and operational phases.

But many in the industry are questioning whether these explanations make sense. Ørsted won fresh support from the UK Government in Contracts for Difference (CfD) allocation round six in September 2024. The offshore wind industry has not seen the same upheaval in the last nine months as it did in 2022 and 2023, so there should be minimal impact on the economics of the project.

This axing has ended Ørsted’s plan to take a final investment decision on Hornsea 4 in late 2025, and will focus minds in the UK Government about how to ensure their refinements to CfD allocation round 7 do not repeat this failure.

Jérôme Guillet, managing director at advisory firm SNOW, argued in this post that the UK Government should introduce stricter penalties on companies who renege on their CfD. Guillet wrote that the main penalty of not being allowed to bid in the next two rounds is “much too weak”.

He said companies in charge of these developments “should be forced to build the project or stripped of their licence on the zone and forced to pay a penalty equal to a substantial fraction of that investment cost”; or even banned from being able to secure “any offshore licence for multiple years”. This would stop utilities from submitting bids to win projects at unrealistic strike prices. We will find out how far the UK Government goes in its upcoming changes to the CfD regime.

But will the cancellation of Hornsea 4 also open the door for Chinese offshore wind turbine makers in the UK?

On Monday (12th May), reports emerged that Vårgrønn and Flotation Energy are in talks with UK ministers on whether they can use turbines from MingYang Smart Energy at their 560MW Green Volt floating offshore wind farm.

MingYang is the developers’ preferred supplier, but they want to know if using the Chinese manufacturer’s machines will land them in political trouble.

Ministers have been wary about the growing influence of Chinese companies in the UK due to fears about national security and whether they want key infrastructure in the hands of foreign superpowers.

These fears were exacerbated last month as the UK Government stepped in to take control of British Steel due to fears that its owner, China’s Jingye Group, would shut down the company’s operations in Scunthorpe. As a result, some ministers are now calling for Chinese companies to be locked out of owning vital UK infrastructure.

But will they soften their position after the Hornsea 4 debacle?

After all, one of the main appeals for western developers of using Chinese offshore wind turbines is that they are cheaper, but also well-tested in China’s fast-growing offshore wind market. UK ministers may take a more lenient view on their use if they think the savings to developers will lead to the delivery of more offshore wind farms, and support the stretching goal of 50GW installed offshore wind in UK waters by the end of 2030. That means a tripling from 14.7GW in operation last October in only five-and-a-half years.

Green Volt’s developers said they would uphold UK ministers’ decisions about national security. That is a sensible move. The use of Chinese turbines would attract a great deal of discussion and some criticism from in the wind industry, the media and the public at large. Green Volt’s developers will need support in high political places if they are to successfully navigate that controversy.

Meanwhile, the Guardian quoted a UK Government source who said it would undertake “rigorous processes to look at the role of China in our supply chain and investment in critical infrastructure”.

They will do this “taking into account the national security considerations, as well as our need for investment in the supply chain”. The need for investment in the supply chain is essential, and the Government is sticking to its long-term targets for the rollout of renewables.

High-profile failures like Hornsea 4 could open politicians’ minds to new ways to ensure offshore wind farms make financial sense, including the use of tried and tested Chinese machines. The door is now a little more open for MingYang and its cousins in UK waters, but it will still have to push its way in.

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