Hyosung Heavy Industries' contract to supply ultra-high voltage power equipment to Orsted, the world's leading offshore wind power company based in Denmark, which was signed in November last year, has been canceled after six months.
On May 8, Hyosung Heavy Industries announced that, following Orsted's notification of contract termination, the agreement to supply 400kV (kilovolt) ultra-high voltage transformers and reactors?devices that improve power quality?for the UK's Hornsea 4 offshore wind project has been terminated.
Orsted had been pursuing the Hornsea 4 offshore wind project, which aimed to build an offshore wind farm with a capacity of 2.4GW (gigawatts) near the Yorkshire coast in northeastern England. However, the company canceled construction of the power plant due to increased costs and other factors.
Rasmus Errboe, CEO of Orsted, announced the suspension of the Hornsea 4 project in a statement the previous day, citing weakened value creation due to adverse macroeconomic conditions, continued supply chain issues, and increased execution, market, and operational risks.
Hyosung Heavy Industries stated, "This case is due to a unilateral contract termination notice from the counterparty, resulting from increased supply chain costs and high interest rates. It is not a termination due to any defect in our performance."
The company further explained, "No supply has been carried out under this contract, and discussions will be held with the counterparty regarding follow-up procedures after the contract termination."
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