Danish offshore wind champion Orsted has increased its full-year guidance for earnings before interest, taxes, depreciation and amortisation (Ebitda) by DKr1bn ($149m) to DKr16-17bn in 2020 on updated assumptions regarding the divestment of the transmission asset for Hornsea 1.

orsted in 2019 had commissioned Hornsea 1, so far the worlds largest offshore wind farm, with a capacity of 1.2GW.

For offshore wind farms in the UK, the utility constructs and subsequently divests its transmission asset, which is a regulatory requirement and is conducted in a process led by Ofgem, the UK regulatory authority for gas and electricity markets.

Following further progress in the divestment process, we have lowered our assumption regarding the preferred bidders expected return requirement on the transmission asset, rsted said in a press release.

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 Orsteds own share of the asset will materialise over the lifetime of the asset, the company added.

Asked by Recharge, whether possible future impacts by the spread of the Coronavirus could impact its business performance this year, Orsted said its business so far is unaffected by the situation.

But of course we are closely monitoring the situation, and we have implemented precautionary measures in all our offices, based on the advice given by the authorities in the countries we operate in, our travel security collaboration partner, and the health and precaution guidelines issued by WHO, the company said in a statement.

Read the original post:

Orsted raises guidance on UK offshore wind transmission divestment - Recharge