Trump’s Offshore Wind Policy Shift Sends European Shares Tumbling
The European wind industry was dealt a significant blow on Tuesday as U.S. President Donald Trump’s decision to axe support for new U.S. offshore wind power sent shares plummeting.
Orsted Takes a Hit
Danish wind giant Orsted was the hardest hit, with its shares diving as much as 17% after reporting a staggering 12.1 billion Danish crowns ($1.69 billion) in impairment charges related to the U.S. offshore market. The main culprit behind the plunge was a delay and increased costs for Orsted’s Sunrise Wind project, which is set to be the largest U.S. offshore wind farm once completed. However, analysts pointed out that impairments on seabed leases, directly linked to Trump’s policy shift, also played a significant role.
A Cloudy Outlook for U.S. Offshore Wind
Trump’s suspension of new federal offshore wind leasing pending an environmental and economic review has cast a shadow over the industry’s future in the U.S. The President’s criticism of wind mills as “ugly, expensive, and harmful to wildlife” has only added to the uncertainty. Orsted and other companies have struggled to tap into the potential of the U.S. offshore wind market, and Trump’s vows to scrap offshore wind projects have further complicated the industry’s outlook.
Prysmian Abandons U.S. Plant Plans
In a separate development, Italy’s Prysmian announced it would abandon plans to build a plant in the United States to manufacture cables for offshore wind parks. The company cited a lack of confidence in the U.S. market, with its transmission business backlog of 18 billion euros entirely concentrated in Europe. Prysmian’s decision is a significant blow to the U.S. offshore wind industry, which was already reeling from Trump’s policy shift.
Ripple Effect on European Utilities
The impact of Trump’s policy shift was felt across European utility companies, with shares in Portugal’s EDP Renovaveis and Germany’s RWE trading 2% and 1% lower, respectively. Wind turbine makers Nordex and Vestas also saw their shares fall around 2%. The U.S. renewables market is a key growth sector for several European utility companies, and Trump’s policies have raised concerns about the industry’s future prospects.
A Challenging Road Ahead
As the European wind industry struggles to come to terms with Trump’s policy shift, analysts are warning of higher risks for the U.S. offshore wind industry. With the President’s policies against the industry, the risk of no further U.S. offshore wind development over the medium term is a very real possibility. As the industry navigates this challenging landscape, one thing is clear: the road ahead will be fraught with uncertainty.
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