Donald Trump's war on the Danish wind energy giant

CopenhagenUS President Donald Trump has been harboring animosity toward wind energy since wind turbines ruined his ocean views at one of the tycoon's golf courses in Scotland. Since Trump returned to the White House, he has also claimed that wind farms are "ugly, expensive, and an unreliable source of energy," and has launched a crusade against the wind energy industry. One of the companies that has felt the most headwinds from the US administration is the Danish energy giant Ørsted, a pioneer and world leader in the construction of offshore wind farms, with two of its major projects currently under construction in the US.

The Danish company had completed 80% of the Revolution Wind offshore wind farm, which has 65 turbines with the capacity to generate energy for 350,000 homes in the states of Rhode Island and Connecticut. The company had invested around $5 billion in the project so far, but the US Department of the Interior ordered its suspension overnight at the end of August. Despite the large investment and the wind farm's near completion, the US administration claimed that the wind turbines "put national security interests at risk," an argument that surprised and seemed more than questionable to experts.

The suspension has cost Ørsted €13 million per week for a month, in addition to a collapse in its stock market value due to investor distrust. To counter the situation, the Danish company decided to file a lawsuit against the Trump administration, accusing it of "illegally blocking the project" and adding that the order was "arbitrary, irrational, and issued in bad faith," according to a company statement.

Finally, a US district court has allowed the resumption of work to complete the project, but the danger for the company is not yet over, as the US government could still appeal the decision. Furthermore, this conflict comes at a time when relations between the governments of Washington and Copenhagen are more tense than ever due to Donald Trump's ambitions to possess the autonomous Danish territory of Greenland. According to Danish analysts, this issue also does not help find an agreement favorable to Ørsted's interests in the US, of which the Nordic country's government owns 50.1% of the shares.

But Donald Trump's crusade against offshore wind farms is not only an attack on the Danish energy company; it affects the entire green transition industry in the country. Last April, the US administration attempted to halt another offshore wind farm planned by the Norwegian company Equinor off the coast of New York, although its halt has been unsuccessful. The White House has also eliminated and limited subsidies for wind and solar energy, making the red tape much more burdensome for already approved projects, while actively promoting the oil, gas, and coal industries.

Extraordinary capital increase

But despite the good news of the restart of construction on the Revolution Wind wind farm, Ørsted's headaches in the US haven't ended there. The company's other major project, called Sunrise Wind, plans to have a generating capacity of 924 MW to provide sustainable energy to 630,000 New York homes. The problem is that in an unfavorable environment for the renewable energy sector, the Danish company is unable to find interested investors willing to purchase parts of the project, so the construction of this wind farm has become a financial drain for the company. Furthermore, the company has been struggling for months with problems stemming from inflation, rising interest rates, and tariffs imposed on wind turbine parts manufactured abroad, factors that have significantly reduced the profitability of its projects.

This crisis has led Ørsted executives to ask their investors for a capital increase of 8.037 billion euros (equivalent to 46% of the company's value) to compensate for the failure of its Sunrise Wind project. CEO Rasmus Errboe explained in a statement that "Ørsted and our industry find themselves in an extraordinary situation due to the adverse market development in the United States, coupled with the macroeconomic challenges and supply chain problems of recent years," he said to justify the large capital increase.

For the moment, the Danish government has already announced that it will launch a financial float to provide half of the capital the company needs (4.018 billion euros), since wind energy is a strategic sector for Denmark's energy policy. Shareholders also approved the capital increase, despite seeing that the company has lost 80% of its peak value reached five years ago in the last year and that uncertainty surrounding Donald Trump's crusade will continue.