Trump wants to ban wind farms, stock price of the world's largest offshore wind power operator plummets

Trump aims to revitalize fossil fuels, and the world's largest offshore wind developer Ørsted can no longer tolerate it. On January 20 local time, Danish offshore wind giant Ørsted announced another large-scale reduction in its U.S. operations. Specifically, Ørsted will recognize a total impairment of 12.1 billion Danish kroner (approximately 1.7 billion USD) for its U.S. business. This follows a previous impairment of 28.4 billion Danish kroner in 2023, marking another significant write-down of Ørsted's U.S. portfolio. Ørsted attributes this to rising interest rates, supply chain challenges, and "market uncertainty" affecting the value of seabed leases. It is noteworthy that this move coincides with Trump's presidency, casting a shadow over the renewable energy industry's prospects—just hours after the latest impairment announcement, Trump was officially inaugurated and suspended new offshore wind leases. After the market opened on Tuesday, Ørsted's European stock fell over 17%, exacerbating the decline seen over the past year. By the close of U.S. markets on Tuesday, Ørsted's U.S. stock plummeted nearly 10%. Ørsted CEO Mads Nipper stated that these impairments are "very disappointing," but the company remains "committed to the U.S. market in the long term." Nipper added, "We will continue to navigate the complexities and uncertainties faced in the emerging U.S. offshore wind industry." Ørsted entered the U.S. market in 2018, becoming a pioneer in the country's offshore wind sector. However, with rising interest rates and supply chain pressures post-pandemic, Ørsted, like many of its peers, is facing difficulties. In November 2023, Ørsted announced the abandonment of two projects off the coast of New Jersey and recognized an impairment of 28.4 billion Danish kroner, exceeding market expectations. To reverse its business challenges, Ørsted announced in February last year the suspension of dividends, layoffs of up to 800 employees, and withdrawal from the offshore wind markets in Norway, Spain, and Portugal to focus on core business areas. Despite the challenges, Ørsted still stated it would maintain its guidance for an operating profit of 24 billion Danish kroner for the full year of 2024. The company noted that the performance of its onshore and offshore wind farms met expectations, with total revenue of 79.3 billion Danish kroner in 2023