The Danish government moved Monday to contribute half of a new $9.4 billion rights issue for beleaguered wind energy developer Ørsted, as the company tries to maintain construction of its remaining projects in U.S. waters in the face of opposition from the Trump administration.
The company said it would offer new shares for sale, after cancelling a planned partial divestment of its Sunrise Wind project off New York citing a “material adverse development” in the U.S. market. The surprise news set off a plunge in the company’s existing stock prices, which had already lost 80% from its 2021 peak.
The Danish state’s pledge of support would defend its own 50.1% stake in the energy company.
“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,” Ørsted CEO Rasmus Errboe said in a statement Monday.
“To deliver on our business plan and commitments in this environment, we’ve concluded that a rights issue is the best solution for Ørsted and our shareholders. The rights issue will reinforce our ability to realize the full value potential of our existing portfolio and capture future value-creating opportunities in offshore wind.”
During the 2024 presidential campaign President Trump promised to scrap offshore wind projects “on day one” of his second administration. U.S. Interior Secretary Doug Burgum offered one hint that some projects might proceed, when in May the administration struck a deal to allow Equinor’s Empire Wind 1 project to resume construction off New York.
But in recent weeks the Trump administration has doubled down on its threats against wind and solar energy developers, moving to review and revoke previous approvals and permitting.
The Danish government owns 50.1% of Ørsted, founded as Danish Oil and Natural Gas to manage production in the North Sea, before the company shifted toward renewable energy in the 1990s and changed its name in 2017. During the first Trump administration and the Biden years following Ørsted was a major player in the U.S. wind market.
But escalating costs took their toll even during the favorable regulatory climate of the Biden administration. In fall 2023 Ørsted abruptly cancelled its Ocean Wind plan for an 1,100-megawatt array off New Jersey, shocking industry boosters who saw it as a flagship project and bellwether for future U.S. developments.
