Ørsted Blames Trump’s Pressure on Offshore Wind as it Seeks Capital
Ørsted, one of the leading developers of renewable energy including offshore wind projects, is turning to its shareholders to raise additional capital, citing the pressure on the industry from the Trump administration. The company surprised investors by announcing it will sell rights to raise $9.4 billion, nearly half the company’s current market valuation, causing its stock price to collapse nearly 30 percent on Monday, August 11.
The company cited a “material adverse development” in the U.S. market for offshore wind development. Ørsted had bet heavily on the U.S. market, paying high valuations to win leases before the Trump administration launched its crackdown on the industry and costs began to soar across the global supply chain. Several years ago, the company walked away from two large wind farms planned for New Jersey, and this year said it would not proceed with the UK’s largest wind farm project, Hornsea 4, due to rising costs.
Major wind developers have followed a business model of taking the risk to win the leases and investing the time to gain permit approvals before starting the development of the wind farms. With strong investment interest, they were selling portions of the projects, often to private equity or investment managers raising the capital to fund future projects.
Ørsted reports that after the Trump administration suspended permitting for Equinor’s New York offshore wind farm earlier this year, investors have soured on the U.S. market. They view the risk as too high based on the continuing opposition from the Trump administration.
Ørsted was in discussions with an investor to purchase a portion of its Sunrise Wind project, a 924 MW offshore wind farm located roughly 30 miles off the coast of New York's Montauk Point. Work is underway both onshore and off for the project, with the first foundations having recently gone in. However, the board reports it has decided to end discussions on a possible sale of a portion of Sunrise Wind, meaning it will also not benefit from expected project financing and resulting in an incremental cost of approximately $6.2 million.
The company is calling the rights offering the best solution, while some analysts said it was the only option left for Ørsted. The Danish Government, which owns half of Ørsted, has indicated it will participate in the rights offering. The company says two-thirds of the proceeds will be required to fund the construction of Sunrise Wind, and the remainder will be used to develop future projects.
The company highlights that it currently has 8.1 GW of offshore wind projects under construction by 2027. It reports continued “good progress” across its entire construction portfolio according to plan, with almost 70 percent of the offshore wind turbines installed at Revolution Wind, its other U.S. project, which is due to be completed in 2026 and supply power to Connecticut and Rhode Island.
Operationally, it said the business is recovering and lowering costs. It cited strong earnings of DKK 13.9 billion ($2.2 billion), supporting its full-year EBITDA guidance of DKK 25-28 billion. The rights issue announced today, management said, would strengthen Ørsted’s capital structure and provide financial robustness in the years 2025 through 2027.