Trump halt on offshore wind energy leases hits European firms

By Stine Jacobsen

COPENHAGEN (Reuters) -Shares in European wind energy firms fell on Tuesday after U.S. President Donald Trump suspended offshore leasing for wind on his first day in workplace, including to ache in an trade that had turned to the U.S. to assist revive its fortunes.

The worldwide offshore wind trade has struggled to play the position that many governments had envisaged of their plans to cut back carbon emissions. Escalating prices, provide chain points and planning delays have hit the trade and led to challenge cancellations and delays.

Former President Joe Biden’s inexperienced funding coverage had offered help for the sector. Trump on Monday suspended new federal offshore wind leasing pending an environmental and financial evaluate, saying wind generators are ugly, costly and hurt wildlife.

Denmark’s Orsted (CSE:ORSTED) was the most important decliner, plunging 17% because it took a $1.69 billion impairment cost on U.S. initiatives.

A delay and better prices for Orsted’s Dawn Wind challenge, which as soon as accomplished is predicted to be the biggest U.S. offshore wind farm, had been the primary motive for the share worth plunge, analysts stated.

The corporate additionally flagged impairments on seabed leases that might be immediately linked to Trump, Sydbank analyst Jacob Pedersen instructed Reuters.

“Orsted now has some property within the U.S. which are nugatory. If there may be nothing to be constructed due to Trump, Orsted can neither promote nor use the leases,” he stated.

Different firms concerned within the wind trade additionally fell.

Portugal’s EDP Renovaveis (ELI:EDPR) shares fell by round 1.6%, Germany’s RWE (LON:0HA0) 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:PRY) on Tuesday stated it will abandon a plan to construct a plant within the U.S. to make cables for offshore wind parks. 

Prysmian’s shares, which closed at a document excessive on Monday, misplaced round 1% on Tuesday. 

Shares in nuclear firms rallied on Trump’s help for reinforcing energy provides to satisfy the rising wants for knowledge processing.

Shares of U.S.-based uranium miners like Vitality Fuels (TSX:EFR) and enCore Vitality (NASDAQ:EU) rose over 4%, whereas nuclear energy firms like utility Vistra, Talen Vitality and Constellation Vitality (NASDAQ:CEG) had been up between 4% and eight% within the afternoon commerce.

Trump’s vitality secretary decide, Chris Wright, instructed U.S. senators in his affirmation listening to final week that his first precedence can be to increase home vitality manufacturing together with nuclear energy and liquefied pure gasoline.

RISK TO EXISTING US WIND POWER PROJECTS

The U.S. has round 2.4 gigawatts (GW) of advanced-stage offshore wind developments which have reached ultimate funding determination and are below building. These are unlikely to be impacted by the order, in accordance with Rystad Vitality.

The environmental and financial evaluate of current offshore wind leases might, nevertheless, pose some threat for builders of current initiatives, analysts stated.

The American Clear Energy Affiliation (ACP), a U.S. clear vitality trade group, stated it strongly opposed Trump’s govt order on wind leasing and allowing.

“States voting for President Trump are eight of the highest 10 states by way of reliance on wind energy with many relying on wind for a major share of their electrical energy use.  Proscribing wind improvement in these areas is for certain to extend shopper vitality payments,” it stated.

In 2024, the oil and gasoline trade donated $32.3 million to Trump and teams affiliated to him, as per knowledge from OpenSecrets. As compared, Trump was capable of elevate simply $453,687 from the U.S. renewable sector.

The U.S. renewable trade contributed $2.9 million in political donations, with 78.7% of it going to Democrat candidates.

($1 = 0.9614 euros)