Orsted shares hit record low after Trump administration halts project
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The news: Shares in wind farm developer Orsted plummeted on Monday’s market open after the US government ordered the company to stop construction on an almost-completed project.
The numbers: Shares in Orsted declined as much as 19% in Copenhagen by mid-morning on Monday, pushing shares down almost 50% this year and wiping nearly USD8 billion ($12.31 billion) off the company’s value.
Revolution Wind, of which Orsted and a BlackRock unit each own half, was due to begin operations next year and supply enough power for 350,000 homes in Rhode Island and Connecticut under 20-year contracts.
Orsted says the USD1.5 billion project is 80% complete with 45 out of 65 wind turbines having been installed.
The context: On Friday evening, the US Bureau of Ocean Energy Management issued a stop-work order for Orsted’s Revolution Wind Project off Rhode Island, saying that the government needs to “to address concerns related to the protection of national security interests”, without further details.
The US President has repeatedly criticised offshore wind farms and has halted new leases on sites and permits for offshore wind farms. He has also rolled back tax credits which supported wind projects.
Bloomberg reports that Orsted’s management is meeting with investors and advisors in London on Tuesday to reassure them that the crisis is under control and that its planned rights issue will proceed.
In May, Norwegian energy company Equinor was able to resume its USD5 billion Empire Wind project off the New York coast after the US government reversed an order to halt construction on the development.
Equinor, which owns a 10% holding of Orsted, is offering advice to the Danish company learned from its own experience.
The sources: Bloomberg, Financial Times, US Bureau of Ocean Energy Management, Orsted statment
