Ørsted Industry suffers heavy losses, putting the entire wind generation under pressure
Energy company Ørsted lost a quarter of its value on the stock market on Wednesday. The Danish company, the world’s largest developer of offshore wind farms, warned that it might have to make a write-down of $2.3 billion on its American wind projects.
Ørsted, with a turnover of $17 billion last year, is the next in line of developers reporting setbacks with their new offshore wind farms. On Wednesday, the stock price reached its lowest level in four years.
In a statement, the Danish company reports that its projects Ocean Wind 1, Sunrise Wind, and Revolution Wind are suffering from delays in components from suppliers. The Danes also counted on tax support from the US government, but that is not currently in sight. This setback is also leading to a potential downgrade.
The rising interest rates in the United States are also causing concerns, Ørsted acknowledges. It does express continued confidence in the American project. Mads Nipper, CEO of Ørsted, stated on Wednesday that they are exerting “maximum pressure” on the US government to provide financial support. Nipper intends to make a final decision later this year, while analysts are urging them to figuratively “sink” the American project.
The company, which went public in 2016 amidst the wind energy hype and is also active off the North Sea coast, earlier this year acquired its remaining stake in the Ocean Wind 1 project off the coast of New Jersey from Public Service Enterprise Group.
Swedish competitor Vattenfall already halted a wind farm off the British coast in July, its largest in Europe. The costs for materials were found to have increased by 40%, and it also faced higher interest expenses. It wrote off half a billion euros in prework costs.
Siemens Energy, in turn, needs to set aside over 1.5 billion euros for repairs to the wind turbines of Siemens Gamesa, its subsidiary active in the North Sea. Its stock price declined by almost 35% in a span of six months.