Vestas exemplifies green energy’s unsung winners

Oersted A/S

05/11/2025 11:57

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Yawen Chen

LONDON, Nov 5 (Reuters Breakingviews) - The clean energy transition is showing its class divide. At one end sit the overextended titans of offshore wind, battered by cost concerns and political pushback. At the other is a less glamorous cohort quietly minting profits from other sorts of green projects that are moving forward. The latest results from Vestas Wind Systems VWS.CO, the world’s biggest wind turbine maker, place it in the latter camp.

A 14% jump in Vestas’ share price after its third-quarter results on Wednesday - meaning the company is now up 52% this year - speaks volumes. After a long turnaround effort, the Danish group announced an operating profit 50% ahead of consensus helped by a more profitable onshore business. Average selling prices for these onshore projects rose 12% year on year to roughly 1 million euros per megawatt of installed capacity, while the total value of new orders soared more than 80%, per UBS analysts. The offshore wind business, meanwhile, continued to sap profitability as depreciation expenses mounted.

Investors are rewarding Vestas, which counts 85% of its turbine sales from onshore projects, for delivering a more dependable and cheaper end of wind power. Onshore wind remains the world’s least expensive source of new generation at just $0.034 per kilowatt hour, according to the International Renewable Energy Agency. It requires simpler build-outs, and comes with faster permitting and usually greater political acceptance.

Vestas’ exposure to this segment looks particularly smart in today’s hostile policy climate. The United States’ new One Big Beautiful Bill Act accelerates the phase-out of tax credits that once underpinned renewable investment. President Donald Trump’s new tariffs on steel and other components are inflating green supply chain costs. Yet demand for clean electricity is being turbocharged by the rise of data centres and artificial intelligence, which sweetens returns as electricity prices rise.

Others have not been so lucky. Danish peer Orsted ORSTED.CO, the global leader in developing offshore wind farms, on Wednesday said it swung to a 1.7 billion crown ($266 million) quarterly loss after U.S. tariffs, and project delays forced fresh write-downs. Trump’s declared hatred for the sector only adds more uncertainty, with damaging stop-work orders and permitting issues.

Yet Vestas’ fortunes reflect a broader sector rally stretching to other cost-efficient technologies such as solar and batteries. The iShares Global Clean Energy ETF, which includes $28 billion First Solar and $30 billion Bloom Energy, has risen 50% this year, outpacing global equities tracked by the MSCI World Index threefold. The International Energy Agency still expects global renewable power capacity to double between now and 2030, increasing by 4600 gigawatts. Investors who know where to place their green bets are getting their just deserts.

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CONTEXT NEWS

    Danish wind turbine maker Vestas on November 5 reported a 77% year-on-year rise in operating profit before one-off items to 416 million euros ($485 million) for the three months ended September 30, above the 305 million euros expected by analysts in a company-compiled consensus.

    The company now expects full-year 2025 sales of between 18.5 billion and 19.5 billion euros, compared to a previous outlook of between 18 billion and 20 billion euros. It also sees its 2025 operating profit margin before special items to be between 5% and 6%, compared with a prior forecast of between 4% to 7%.

    Vestas said it would also launch a share buy-back programme of 150 million euros.

    Vestas shares rose 12% to 147 Danish crowns as of 1030 GMT on November 5.

Clean energy shares outperform despite offshore wind drag https://www.reuters.com/graphics/BRV-BRV/akvejzrqjpr/chart.png

(Editing by George Hay; Production by Shrabani Chakraborty)

((For previous columns by the author, Reuters customers can click on CHEN/yawen.chen@thomsonreuters.com))