Energy giant takes £4bn hit as Trump goes to war on ‘con job' wind farms

Telegraph

8 hours ago

More than £4bn was wiped off the value of the world's biggest offshore wind farm developer after Donald Trump declared war on renewable energy projects.
Shares in Ørsted plunged by an unprecedented 29pc in early trading to a record low after it revealed it would seek to raise 60bn Danish kroner (£7bn) from a new stock offering as it battles a downturn in the industry.
The company, which is majority owned by the Danish state, will hold an extraordinary general meeting on Sept 5 to approve the plans.
Rasmus Errboe, chief executive, said the company had been hit by 'adverse market developments in the US', where the president is waging a war against the wind industry.
Mr Errboe said the company's fundraising through shareholders was the 'best solution' to strengthen the company's balance sheet and fund its Sunrise Wind development, off the coast of New York.
'Con job'
It comes after Mr Trump briefly halted work on a separate wind farm off the coast of New York in April and last month branded the renewable energy source a 'con job' during a visit to Scotland.
He said at his Turnberry golf course that turbines spoiled the landscape and sucked in hefty subsidies, adding: 'The whole thing is a con job. It's very expensive.'
President Trump has rolled back subsidies for the renewables industry under his tax cutting bill working its way through Congress. He suspended licensing for new wind farms on his first day back in office in January.
His hatred of turbines stems from a long planning battle he had with Scottish authorities. He opposed plans for a major North Sea wind power development that he complained could be seen from his Aberdeenshire course, but lost the case.
Ørsted usually funds wind farms by selling off stakes in the projects. However, it said on Monday that it was cancelling its planned sale for its New York scheme in favour of the new share issue.
Mr Errboe said: 'Ørsted and our industry are in an extraordinary situation with the adverse market development in the US on top of the past years' macroeconomic and supply chain challenges.'
Lene Skole, chairman, said the company faced an 'unprecedented regulatory development in the US' which meant raising money from shareholders was 'the best path forward'.
Jenny Ping, an analyst at City, said Ørsted's decision was 'sensible' in the long run but 'likely painful' in the short term, while Ahmed Farman, at Jefferies, added the move was 'clearly negative'.
Under the share issue, the Danish state will maintain its 50.1pc stake in the energy company, Ørsted said. A spokesman for Norway's Equinor, which holds a 10pc stake, said it would 'assess the proposal'.
The company also plans to raise more than 35bn Danish kroner from selling stakes in its energy projects over the next two years.
It plans to invest around 145bn Danish kroner during that time and insisted its earnings guidance for this year remains on track.
The fundraising plans come amid wider turbulence at Ørsted. In May, the company pulled the plug on the 2.4-gigawatt Hornsea 4 project off the east of England as it blamed rising costs and interest rates.
Wind farm operators are expected to be offered bumper subsidies by Ed Miliband, the Energy Secretary, to attract bids for renewable energy contracts in an auction that launched last week.
A wind auction in 2023 failed to receive any bids after ministers initially refused to raise the subsidies on offer. They later backed down, with Mr Miliband overseeing a record £3bn of contract for difference awards last year.