Danish offshore wind developer Ørsted has increased its full-year guidance by DKK 1 billion ($148,8 million) and now expects EBITDA excluding earnings from new partnership agreements to be DKK 16-17 billion ($2,38 billion - $2,53 billion) in 2020.
Ørsted said the guidance increase was due to updated assumptions regarding the divestment of the transmission asset for Hornsea 1 wind farm, located 120km off the Yorkshire Coast, the UK.
"For offshore wind farms in the UK, we construct and subsequently divest the transmission asset as part of the overall project. The divestment of the transmission asset is a regulatory requirement and is conducted in a process led by Ofgem, the UK regulatory authority for gas and electricity markets," Ørsted explained Wednesday.
It added: "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 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 recognized in EBITDA in 2020, whereas the EBITDA impact on our own share of the asset will materialize over the lifetime of the asset.
The final of 174 wind turbines of the Hornsea 1 offshore wind farm, the world's largest, was installed in October 2019.