Danish wind energy company Ørsted eyes capital increase following challenges in the US market.
In a significant development, Danish offshore wind power group Ørsted announced plans to raise 60 billion kroner ($9.4 billion) by selling new shares [1]. This move comes in the wake of financial difficulties caused by the US President Donald Trump's opposition to the sector.
Trump's administration has imposed restrictive policies that hinder the development and financing of wind projects in the US. His executive actions include withdrawing wind projects from offshore leasing opportunities and imposing a 60-day moratorium on all renewable energy projects offshore. Furthermore, Trump spearheaded more stringent rules defining what counts as "breaking ground" to qualify for renewable energy tax credits, removing the previous less burdensome 5% upfront cost requirement and demanding demonstration of significant physical work such as foundation excavation [1].
These policy changes make it harder and riskier for companies like Ørsted, which invest heavily in offshore wind, to secure US project approvals and maintain financial viability. The uncertainty and increased costs linked to qualifying for tax credits undermine project economics, thereby impacting Ørsted’s US investments. Trump’s public statements further signal ongoing hostility to wind power development, reducing investor confidence in the sector in the US [1][2].
Following the announcement, shares in Ørsted tumbled 28 percent on the Copenhagen stock exchange [1]. The stock exchange transaction involved Ørsted's shares, with the funds raised intended to address the company's woes.
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[1] Source: [News Article Link] [2] Source: [News Article Link]
- In the face of Trump's administration's restrictive policies against renewable energy, particularly wind power, the art of securing US project approvals for companies like Ørsted has become increasingly challenging, as investment in offshore wind becomes riskier.
- The finance and business sectors, including the energy industry and news outlets, have closely followed the developments in the US wind power sector, with many expressing concerns about the impact of Trump's opposition on the financial viability of companies investing in offshore wind.
- The recent news of Ørsted raising 60 billion kroner through the sale of new shares is a testament to the industry's resilience and a sign that companies are seeking alternate sources of funding to mitigate the risks associated with investing in the US offshore wind power sector.
