Orsted’s Shares Plummet as Wind Generator Blames Trump for Struggles in Energy Sector

Ørsted Launches $9 Billion Fundraising Amidst US offshore Wind Challenges

COPENHAGEN, Denmark – Danish energy giant Ørsted announced plans today to raise more than $9 billion in capital, a move triggered by adverse market conditions in the United States and broader economic headwinds. the fundraising,backed by the Danish government which holds a 50% stake in the company,aims to bolster Ørsted’s financial position as it continues development of key offshore wind projects.

The declaration sent Ørsted’s share price tumbling on Monday morning, falling to 220.5 kroner (£25.58) – below its initial public offering price in 2016 of 235 kroner.

Ørsted intends to proceed with the Sunrise Wind project off New York and the Revolution Wind project off Rhode Island. The company stated the capital injection will provide “financial robustness” while it pursues its global expansion, targeting enough offshore wind capacity to power over 8 million homes within the next two years.

“Ørsted and our industry are in an remarkable situation with the adverse market development in the US on top of the past years’ macroeconomic and supply chain challenges,” explained CEO Rasmus Errboe.He emphasized the rights issue will strengthen the company’s ability to maximize the value of its existing portfolio and capitalize on future opportunities in the rapidly evolving offshore wind sector.

Evergreen Insights: The State of Offshore Wind

This development underscores the complex realities facing the burgeoning offshore wind industry.While widely considered crucial to achieving global climate goals, the sector is increasingly vulnerable to economic fluctuations, supply chain disruptions, and evolving regulatory landscapes.

The US market, in particular, has presented unexpected hurdles. Rising interest rates, inflation impacting project costs, and logistical challenges have created a difficult environment for developers. Ørsted’s situation highlights the need for robust financial planning and adaptability in navigating these challenges.

Despite these short-term setbacks,the long-term outlook for offshore wind remains positive. Driven by increasing demand for renewable energy, technological advancements are continually driving down costs and improving efficiency. Governments worldwide are setting ambitious targets for offshore wind deployment,recognizing its potential to deliver clean,reliable power and create important economic opportunities.

The Danish government’s backing of Ørsted signals a continued commitment to the sector, and the company’s proactive fundraising is a strategic move to ensure its long-term viability in a dynamic and competitive market. Investors and industry observers will be closely watching how Ørsted navigates these challenges and executes its ambitious growth plans.

What specific Trump-era policies directly contributed to increased costs and delays for Orsted’s US offshore wind projects?

The Impact of Policy Shifts on Renewable Energy Investments

Recent market turbulence has seen Danish energy giant Orsted experience a notable drop in share value. While multiple factors contribute to this decline, a surprising element has emerged: direct attribution of struggles to policies enacted during the Trump management. This isn’t simply a case of retrospective blame; it highlights the long-term consequences of political decisions on the offshore wind energy sector and broader renewable energy investments.

Trump-Era policies and Their Lingering Effects

During Donald Trump’s presidency,a series of actions were taken that demonstrably hampered the growth of the US wind power industry. These included:

Tariffs on Wind Turbine Components: Imposed tariffs on steel and aluminum imports, considerably increasing the cost of building wind farms.This directly impacted project profitability and slowed progress.

Reduced Tax Credits: While the Investment Tax Credit (ITC) and Production Tax Credit (PTC) weren’t entirely eliminated, uncertainty surrounding their continuation created instability and discouraged long-term investment.

Permitting Delays: Increased bureaucratic hurdles and delays in permitting processes for offshore wind projects added significant time and expense to development.

Emphasis on Fossil Fuels: A consistent pro-fossil fuel narrative and policy support undermined confidence in the long-term viability of renewable energy sources.

These policies, while seemingly focused on bolstering conventional energy sectors, created a ripple effect that continues to be felt today. Orsted, a major player in the US offshore wind market, has been particularly vocal about these challenges.

Orsted’s Specific Challenges & Recent Project Updates

Orsted’s recent struggles aren’t solely attributable to past policies, but they are undeniably exacerbated by them. The company has faced headwinds including:

Supply Chain Disruptions: Global supply chain issues, compounded by the tariff impacts, have driven up component costs and delayed project timelines.

Rising Interest Rates: Increased interest rates make financing large-scale renewable energy projects more expensive, impacting returns on investment.

Project-Specific Issues: While not directly linked to Trump-era policies,challenges with specific projects,such as the Ocean Wind project off the coast of New Jersey,have contributed to investor concerns.

However,positive developments continue. As of January 2025, Orsted successfully installed the final turbine at the Borkum Riffgrund 3 offshore wind park in Germany (https://orsted.de/presse-media/news/2025/01/letzte-turbine-im-offshore-windpark-borkum-riffgru-14215100). This demonstrates the company’s continued commitment to wind energy development despite US challenges.

The Broader Implications for Renewable Energy

Orsted’s situation serves as a cautionary tale for the entire renewable energy sector. It underscores the vulnerability of these investments to political shifts and the importance of stable, long-term policy support.

Investor Confidence: Policy uncertainty erodes investor confidence, leading to reduced funding for clean energy projects.

Project Viability: Increased costs and delays can render projects economically unviable, hindering the transition to a sustainable energy future.

Job Creation: Slowed development in the wind energy industry impacts job creation and economic growth in related sectors.

Analyzing the Stock Performance: A Deep Dive

Orsted’s stock has experienced a significant downturn in recent weeks.Analyzing the data reveals:

1. Initial Drop: The initial decline began following the announcement of financial setbacks related to US projects.
2. Trump Policy Link: subsequent statements from Orsted executives directly linking these setbacks to the lingering effects of trump-era policies further fueled the sell-off.
3. Market Sentiment: Negative market sentiment surrounding the broader renewable energy sector, influenced by rising interest rates and supply chain concerns, amplified the impact.
4. Comparative Analysis: Compared to other renewable energy companies, Orsted’s decline has been more pronounced, suggesting a specific vulnerability related to its US investments.

The Future of US Offshore Wind: Navigating the Challenges

Despite the current challenges, the long-term outlook for US offshore wind energy remains positive. The Biden administration has set ambitious goals for offshore wind capacity and is actively working to address the issues that hampered development in the past. Key initiatives include:

Streamlined Permitting: Efforts to streamline the permitting process and reduce bureaucratic delays.

Investment in Infrastructure: Investments in port infrastructure and supply chain development to support the growth of the offshore wind industry.

*Tax Incent