Ørsted Battles for Survival as Trump Targets Wind Energy
- Trump’s executive orders and legislation have severely restricted U.S. wind development, stalling Ørsted’s 704-MW Revolution Wind project despite being 80% complete.
- Ørsted sued the Trump administration over the stop-work order, calling it unlawful and in bad faith, as the company raised $9.4 billion in new capital to stay afloat.
- Equinor offered $1 billion in support, fueling speculation of a potential merger as Ørsted’s shares have plunged nearly 90% since 2021.
The Danish wind giant Ørsted is fighting for its survival after United States President Donald Trump introduced a barrage of orders limiting the growth of the wind power sector. After declaring an energy emergency in the U.S. upon entering office in January, Trump has spent the past eight months introducing executive orders and legislation to strengthen fossil fuel production and limit the expansion of the renewable energy sector. This has led to greater investor uncertainty and has caused project delays and financial harm to green energy producers.
In January, Trump ordered a review of offshore wind permitting and leasing, and in the months since he has introduced a host of orders and laws aimed at curbing wind energy development, which have led to the halt of several major projects, In August, Europe’s largest wind power company, Ørsted, released a statement blaming President Trump for derailing its business model after its market value dropped by nearly a third. It is now fighting to get its business on track.
Ørsted received approval from shareholders for its $9.4 billion rights issue in early September. The company was forced to raise new capital after its profits fell in recent months due to project delays and investor uncertainty, among other factors. The Trump administration halted work on Ørsted’s 704-MW Revolution Windfarm off the coast of Rhode Island and Connecticut in August, despite the company holding project permits and works being around 80 percent complete.
This led Ørsted to sue the Trump administration in September, in a bid to get the project moving again. Orsted requested that the United States District Court for the District of Columbia dismiss the stop-work order, saying it was arbitrary, capricious, unlawful, and “issued in bad faith”. Orsted and its partner Skyborn Renewables have already invested $5 billion in Revolution Wind, a project which is expected to provide power for over 350,000 homes in the region.
Norway’s wind giant Equinor was one of the companies to support Ørsted’s search for capital, offering $1 billion in funding to help keep it afloat. In a bid of confidence, Equinor said it planned to retain its 10 percent ownership of Ørsted, which it completed last December, making it the second-largest shareholder after the Danish government. The Norwegian firm said it was confident in Ørsted’s underlying business and the competitiveness of offshore wind in the future energy mix. As part of the move, Equinor plans to nominate a candidate to Ørsted’s board of directors.
Ørsted’s shares have fallen in recent months in the face of various challenges, mainly centred around U.S. policy decisions. The firm’s share prices have decreased by around 90 percent from the 2021 peak. The support from Equinor has made some in the industry question whether the two companies could be heading towards a merger.
It is not just Ørsted that has been hit hard by Trump’s attack on the renewable energy sector. President Trump has long hailed the Biden administration’s Inflation Reduction Act (IRA), the most far-reaching climate policy to date, a “Green New Scam. Greatest scam in history, probably.” His blatant attack on green energy from the moment he entered office, and even before, on his campaign trail, has led to greater investor uncertainty in the sector. Many renewable energy producers and cleantech companies now fear cuts in funding and project delays, after several years of high investment and the rapid acceleration of green energy deployment.
In September, the Trump administration instructed around half a dozen government agencies to draft plans to restrict U.S. wind energy development, as Trump labelled wind farms as ugly, expensive, and inefficient. Agencies that have traditionally had little to do with wind energy have been called upon to support efforts to restrict the development of offshore wind farms. At the Health and Human Services Department, officials are now assessing whether wind turbines are emitting electromagnetic fields harmful to human health, while the Department of Defence (War) is probing whether wind projects could pose a threat to national security.
Following the instruction, Health and Human Services Secretary Robert Kennedy Jr. said he was working with Interior Secretary Doug Burgum, Commerce Secretary Howard Lutnick, Energy Secretary Chris Wright, and Defence Secretary Pete Hegseth as part of a “departmental coalition team” to assess the risks from offshore wind farms. “We’re all working together on this issue,” Kennedy said during a cabinet meeting.
Several agencies are expected to assess their existing policies to see if there are any that are favourable for wind energy development that could be redirected to other forms of energy, particularly fossil fuels. The move will build on previous actions by the Trump administration to curb U.S. wind energy development in favour of oil, gas, and coal, as President Trump looks to largely undo the groundwork laid by the Biden administration for a green transition.
By Felicity Bradstock for Oilprice.com
No comments:
Post a Comment