By Stine Jacobsen
COPENHAGEN (Reuters) – European wind shares fell on Tuesday after U.S. President Donald Trump axed help for brand spanking new offshore wind energy on his first day in workplace, including to ache in an trade that had turned to the US to assist revive its fortunes.
The largest decliner, Denmark’s Orsted (CSE:), which plunged 17%, got here beneath additional pressure from impairments on its U.S. ventures.
The worldwide offshore wind trade, which initially boomed, has been struggling to ship the carbon reductions pursued by many governments as escalating prices, provide chain points and planning points have slowed improvement.
U.S. prospects for wind had seemed extra beneficial due to former president Joe Biden’s inexperienced funding coverage.
However Trump, lengthy identified to favour fossil fuels, on Monday suspended new federal offshore wind leasing pending an environmental and financial evaluate, saying wind generators are ugly, costly and hurt wildlife.
Orsted on Tuesday reported 12.1 billion Danish crowns ($1.69 billion) in impairment costs associated to the U.S. offshore market, triggering a selloff that dragged its share value to some 84% under a peak in 2021.
A delay and better prices for Orsted’s Dawn Wind mission, which is predicted to be the most important U.S. offshore wind farm as soon as accomplished, had been the primary purpose for the plunge, analysts mentioned.
However the firm additionally flagged impairments on seabed leases that might be immediately linked to Trump, Sydbank analyst Jacob Pedersen informed Reuters.
“Orsted now has some assets in the U.S. that are worthless. If there is nothing to be built because of Trump, Orsted can neither sell nor use the leases,” he mentioned.
Different firms, together with wind improvement firms, fell by smaller percentages.
Portugal’s EDP Renovaveis (ELI:) shares fell by round 1.6%, Germany’s RWE (LON:) shed round 0.5%, Norway’s Equinor dropped by 2.2% and wind turbine producer Vestas fell by practically 3% in afternoon commerce.
Italy’s Prysmian (BIT:), the world’s largest cable maker and a significant participant in offshore wind transmission, on Tuesday mentioned it will abandon a plan to construct a plant in the US to make cables for offshore wind parks.
Its shares, which closed at a file excessive on Monday, misplaced round 1% on Tuesday.
RWE SAYS NO IMPAIRMENT
Germany’s RWE, the world’s second-largest offshore wind mission developer after Orsted, mentioned there was no want for impairments on a 2.8 gigawatt U.S. offshore wind mission it’s collectively creating with Britain’s Nationwide Grid (LON:).
“The Executive memorandum on offshore wind did not come as a surprise,” the corporate mentioned. “We currently see no need for impairments as the seabed lease is valid for at least until the 2060s, so it’s a long time to go to realise the project at a later stage.”
EDPR and Vestas declined to remark.
Vestas secured an order from Equinor final yr to energy New York’s Empire Wind 1 offshore wind mission, whereas EDPR has a 50-50 offshore wind JV with Engie referred to as Ocean Winds that’s creating the Southcoast Wind mission off the coast of Massachusetts, on account of start development late this yr.
Germany’s vice chancellor Robert Habeck informed a convention in Berlin that Europe must proceed increasing low-carbon vitality in the course of the Trump presidency, no matter insurance policies and his deliberate withdrawal from the Paris local weather settlement.
The American Clear Energy Affiliation (ACP), a U.S. clear vitality trade group, mentioned it strongly opposed Trump’s govt order on wind leasing and allowing.
“States voting for President Trump are eight of the top 10 states in terms of reliance on wind power with many depending on wind for a significant share of their electricity use. Restricting wind development in these regions is certain to increase consumer energy bills,” it mentioned.
Though opposing wind, Trump issued a flurry of orders meant to spice up vitality manufacturing from different sources, driving up shares of U.S. nuclear energy firms.
($1 = 0.9614 euros)
