In orbifold compactifications on T^2/Z_2 with Scherk-Schwarz supersymmetry breaking, it is shown that (brane-localised) superpotential interactions and (bulk) gauge interactions generate at one-loop higher derivative counterterms to the mass of the brane (or zero-mode of the bulk) scalar field. These brane-localised operators are generated by integrating out the bulk modes of the initial theory which, although supersymmetric, is nevertheless non-renormalisable. It is argued that such operators, of non-perturbative origin and not protected by non-renormalisation theorems, are generic in orbifold compactifications and play a crucial role in the UV behaviour of the two-point Green function of the scalar field self-energy. Their presence in the action with unknown coefficients prevents one from making predictions about physics at (momentum) scales close to/above the compactification scale(s). Our results extend to the case of two dimensional orbifolds, previous findings for S^1/Z_2 and S^1/(Z_2 x Z_2') compactifications where brane-localised higher derivative operators are also dynamically generated at loop level, regardless of the details of the supersymmetry breaking mechanism. We stress the importance of these operators for the hierarchy and the cosmological constant problems in compactified theories.