Orsted takes $1.7 billion hit as Trump slams offshore wind
Bloomberg News|William Mathis|Jan 20, 2025
Orsted A/S recorded a 12.1 billion-krone ($1.7-billion) hit on its earnings as the costs of offshore wind farms, particularly in the US, keep rising. The setback is the latest in a long series of issues for Denmark’s Orsted, one of the world’s biggest developers of wind farms at sea. The news comes as the offshore wind industry in the US faces President Donald Trump who vowed in the first hours of his second term that he will stop leasing areas for new projects.
Orsted A/S recorded a 12.1 billion-krone ($1.7-billion) hit on its earnings as the costs of offshore wind farms, particularly in the US, keep rising. The setback is the latest in a long series of issues for Denmark’s Orsted, one of the world’s biggest developers of wind farms at sea. The news comes as the offshore wind industry in the US faces President Donald Trump who vowed in the first hours of his second term that he will stop leasing areas for new projects.
Orsted A/S recorded a 12.1 billion-krone ($1.7-billion) hit on its earnings as the costs of offshore wind farms, particularly in the US, keep rising.
The setback is the latest in a long series of issues for Denmark’s Orsted, one of the world’s biggest developers of wind farms at sea. The news comes as the offshore wind industry in the US faces President Donald Trump who vowed in the first hours of his second term that he will stop leasing areas for new projects.
“The impairments announced today, and especially the continued construction challenges, are very disappointing,” Mads Nipper, Orsted’s chief executive officer said in a statement on Monday. “We remain committed to the US market in the long term with its potential for renewables to …
... more [truncated due to possible copyright]Orsted A/S recorded a 12.1 billion-krone ($1.7-billion) hit on its earnings as the costs of offshore wind farms, particularly in the US, keep rising.
The setback is the latest in a long series of issues for Denmark’s Orsted, one of the world’s biggest developers of wind farms at sea. The news comes as the offshore wind industry in the US faces President Donald Trump who vowed in the first hours of his second term that he will stop leasing areas for new projects.
“The impairments announced today, and especially the continued construction challenges, are very disappointing,” Mads Nipper, Orsted’s chief executive officer said in a statement on Monday. “We remain committed to the US market in the long term with its potential for renewables to meet the growing electricity demand and create thousands of industrial jobs across the US.”
The financial hit stems from a variety of issues including rising interest rates and higher costs to deliver its Sunrise Wind project off the east coast of New York’s Long Island, Orsted said.
Just under $500 million was due to an expected hit in the market value of Orsted’s seabed leases off the coast of the US. Such early-stage projects require federal approvals that the Trump administration will have broad power to block.
Offshore Wind Industry Braces for Trump’s Turbulence: QuickTake
Despite the impairments, Orsted reported preliminary 2024 earnings before interest, tax, depreciation and amortization of 24.8 billion kroner, excluding new partnerships and cancellation fees, in line with the 24 billion kroner to 26 billion kroner it had previously guided.
Orsted has become emblematic of the promise and risks of offshore wind. The company constructed the world’s first offshore wind farm in Denmark in the early 1990s and has since built up a portfolio of projects around the world.
The technology had benefited for years from decreasing costs from its supply chain and rock-bottom interest rates. But after the pandemic disrupted global supply chains and central banks increased rates to quell inflation, offshore wind developers were among those hit by soaring project costs.
Some of Orsted’s flagship projects in the US were no longer financially viable, leading the company to endure billions in writedowns, cancel two major projects and dismiss two top executives. Nipper unveiled a turnaround plan early last year, cutting the company’s dividend and reducing its expansion plans.