Wrapup 1: European green energy companies hit by Trump's anti-wind policy

Vestas Wind Systems A/S

21/01/2025 13:05

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      Orsted takes further impairments due to U.S. challenges
    

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      Shares plunge 17%, now down around 84% since 2021 peak
    

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      Trump ends government support for new wind power
    

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      Other European wind company shares also fell
    

  
    By Stine Jacobsen
       COPENHAGEN, Jan 21 (Reuters) - European wind shares fell
on Tuesday after U.S. President Donald Trump axed support for
new U.S. offshore wind power on his first day in office, with
top decliner Orsted  ORSTED.CO  further straining under the
weight of impairments on its U.S. ventures.
    Orsted lost as much as 17% after it reported 12.1 billion
Danish crowns ($1.69 billion) in impairment charges related to
the U.S. offshore market.
    A delay and higher costs for Orsted's Sunrise Wind project,
which is expected to be the largest U.S. offshore wind farm once
it is completed, were the main reason for the plunge, analysts
said.
    But the company also flagged impairments on seabed leases
which could be directly linked to Trump, Sydbank analyst Jacob
Pedersen told 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 said.
    U.S. President Donald Trump on Monday suspended new federal
offshore wind leasing pending an environmental and economic
review, saying wind mills are ugly, expensive and harm wildlife.
    Orsted and other companies have struggled to unleash the
potential of the U.S. offshore wind market and the industry's
outlook has been further complicated by Trump's vows to scrap
offshore wind projects as one of his first acts.
    Italy's Prysmian  PRY.MI  will abandon a plan to build a
plant in the United States to make cables for offshore wind
parks, the group said in a statement seen by Reuters on Tuesday.
    Prysmian, the world's biggest cable maker and a major player
in offshore wind transmission, does not see a strong enough
market in the U.S. for offshore wind farms, and says its
transmission business backlog of 18 billion euros is entirely
concentrated in Europe with no U.S. exposure.
    Prysmian's project, announced in 2021, involved an
investment of around 200 million euros ($207 million) in
Somerset, Massachusetts, as part of two preliminary contracts
worth a total of almost $900 million in the U.S., which never
materialised.    
    Shares in Prysmian, which closed at an all-time high on
Monday, fell 1.5% by 1208 GMT while Orsted shares, which have
plunged some 84% since peaking in 2021, traded down 13.6%.  
    "We see higher risks for the U.S. offshore wind industry
given President Trump's policies against the industry, including
the risk of no further U.S. offshore wind development over the
medium term," Barclays analysts wrote in a research note.
    The U.S. renewables market is a key growth sector for
several European utility companies, including Orsted, Portugal's
EDP Renovaveis  EDPR.LS  and Germany's top power producer RWE
 RWEG.DE , which traded 2% and 1% lower, respectively.
    Shares in wind turbine makers Nordex  NDXG.DE  and Vestas
 VWS.CO  fell around 2%.

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 (Reporting by Stine Jacobsen in Copenhagen, Amanda Cooper in
London, Giulio Piovaccari in Milan and Alessandro Parodi in
Gdansk; editing by Terje Solsvik, Nina Chestney and Louise
Heavens)
 ((stine.jacobsen@thomsonreuters.com; +45 2156 90 10;))