Author: Stine Jacobsen
COPENHAGEN (Reuters) – European wind shares fell on Tuesday after U.S. President Donald Trump scrapped support for a new offshore wind farm on his first day in office, further aggravating an industry that has turned to the United States to help revive its fortunes.
The biggest decliner, Denmark’s Orsted (CSE: ), which fell 17%, was under additional pressure from a write-down on its US ventures.
The global offshore wind industry, which was initially booming, has struggled to achieve the carbon reductions sought by many governments as escalating costs, supply chain issues and planning issues have slowed development.
The outlook for US wind has looked more favorable because of former President Joe Biden’s green investment policies.
But Trump, who has long been known to favor fossil fuels, on Monday suspended new federal offshore wind leasing pending an environmental and economic review, saying the wind turbines are ugly, expensive and harm wildlife.
On Tuesday, Orsted reported 12.1 billion Danish kroner ($1.69 billion) in impairment charges related to the U.S. offshore market, sparking a selloff that dragged the share price to about 84% below its 2021 peak.
Delays and higher costs for Orsted’s Sunrise Wind project, which is expected to be the largest US offshore wind farm once completed, were the main reason for the decline, analysts said.
But the company also flagged impairments on seabed leases that could be directly linked to Trump, Sydbank analyst Jacob Pedersen told Reuters.
“Orsted now has some assets in the US that are worthless. If nothing can be built because of Trump, Orsted can neither sell nor use the leases,” he said.
Other companies, including wind farm developers, fell by a smaller percentage.
Portugal EDP Renovaveis (ELI:) shares fell by about 1.6%, German RWE (LON: ) fell about 0.5%, Norway’s Equinor fell 2.2% and wind turbine maker Vestas fell nearly 3% in afternoon trade.
of Italy prismatic (BIT:), the world’s largest cable maker and a major player in offshore wind transmission, said on Tuesday it would abandon plans to build a plant in the United States to make cables for offshore wind farms.
Its shares, which closed at a record high on Monday, lost about 1% on Tuesday.
RWE SAYS NO DAMAGE
Germany’s RWE, the world’s second-largest offshore wind project developer after Orsted, said there was no need to cut the value of a 2.8 gigawatt US offshore wind project it is developing with Britain’s National network (LON:).
“The offshore wind executive memorandum was not a surprise,” the company said. “Currently we do not see the need for reductions as the seabed lease is valid until at least the 2060s, so it takes a long time for the project to be realized at a later stage.”
EDPR and Vestas declined to comment.
Vestas won an order from Equinor last year to power New York’s Empire Wind 1 offshore wind project, while EDPR has a 50-50 offshore wind joint venture with Engie called Ocean Winds that is developing the Southcoast Wind project off the coast of Massachusetts, due to start construction later this year. year.
German Vice Chancellor Robert Habeck told a conference in Berlin that Europe must continue to expand low-carbon energy during Trump’s presidency, regardless of politics and his planned withdrawal from the Paris climate accord.
The American Clean Power Association (ACP), a US clean energy industry group, said it strongly opposes Trump’s executive order on wind leasing and permitting.
“States voting for President Trump are eight of the 10 states with the highest reliance on wind energy, with many depending on wind for a significant share of their electricity consumption. Limiting wind development in these regions will certainly increase consumer energy bills,” he said. are. he said.
Despite headwinds, Trump has issued a series of orders intended to boost energy production from other sources, lifting the shares of US nuclear power companies.
(1 dollar = 0.9614 euros)
