, PIX Blaming Trump, Equinor makes $955 million US offshore wind writedown
Hopes the industry had harboured that projects in the United States would revive the sector were dashed on Trump's first day back in office in January when he suspended offshore wind leases.
Then in April, Interior Secretary Doug Burgum shut down Equinor's Empire Wind development in New York state. He later lifted the stop-work order on the project.
For Equinor, however, the damage has been done.
On Wednesday, it reported its net operating income for the second quarter fell due to having to book a near-billion dollar impairment on its U.S. offshore wind projects.
"This is impacted by an impairment of $955 million due to regulatory changes causing loss of synergies from future offshore wind projects and increased exposure to tariffs," Equinor said in a statement on Wednesday.
"Of this, $763 million is related to Empire Wind 1/South Brooklyn Marine Terminal project and the remainder is related to the Empire Wind 2 lease."
Equinor, majority-owned by the Norwegian state, had won a federal lease for Empire Wind in 2017 under Trump's first administration and secured approval for its investment plans in 2023 during former President Joe Biden's time in the White House.
The global offshore wind market, once touted by governments as a cornerstone of efforts to cut carbon emissions, has faltered under escalating costs and logistical setbacks.
Equinor CFO Torgrim Reitan said the U.S. administration changing its mind on developing offshore wind had affected the value of the group's large onshore terminal in South Brooklyn, built to serve offshore wind farm installations.
"It is a result of changing regulations so there is very little probability for more offshore wind projects coming in the U.S. over the foreseeable future and that is impacting a project that we have related to staging facilities," he told Bloomberg TV.
Equinor would not develop the second phase of the Empire Wind farm, as it had earlier planned, he added.
"We don't intend to push it forward currently," Reitan said of Empire Wind 2.
The total book value after the latest impairments was $2.3 billion, Equinor said on Wednesday.
With a planned installed capacity of 810 megawatts, Empire Wind 1 could generate enough electricity to power half a million homes a year and was expected to begin operating in 2027.
Equinor on Wednesday also reported a decline in core second-quarter results, as expected, due to lower oil prices.
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