Shares in Ørsted experienced a significant decline on Monday, hitting record lows amid investor worries over a halt in operations at the company’s major U.S. offshore wind project. Trading on the Copenhagen Stock Exchange saw Ørsted’s stock plummet by 18%, reaching $27.28 (approximately 174 Danish crowns), marking a troubling milestone for the world’s largest offshore wind developer.
The decline in Ørsted’s stock is part of a broader trend, as the company has lost 46% of its value year to date. The decline was exacerbated earlier this month when Ørsted revealed plans for a $9.4 billion (around 60 billion Danish crowns) rights issue aimed at raising capital from existing shareholders. This announcement followed Ørsted’s warnings about a challenging landscape for the industry, underscoring the ongoing difficulties posed by macroeconomic factors and supply chain issues.
On August 11, Ørsted described the situation as “extraordinary,” attributing the need for fresh capital to adverse market conditions in the U.S. This prompted a notable sell-off, as investors interpreted the capital raise as a signal that the offshore wind sector’s challenges are far from resolved.
Work Stoppage from U.S. Authorities
The most recent decline in Ørsted’s shares was triggered by a stop-work order issued by the U.S. Department of the Interior’s Bureau of Ocean Energy Management (BOEM) on Friday. The order affects the Revolution Wind LLC project, a joint venture between Ørsted and Global Infrastructure Partners’ subsidiary, Skyborn Renewables. Revolution Wind has been directed to halt its offshore activities, and Ørsted confirmed it is taking necessary steps to ensure the safety of workers and environmental protection.
The Revolution Wind project, which is currently 80% complete, had received all necessary federal approvals from BOEM last year and had commenced offshore construction. The project includes the installation of offshore foundations and wind turbines, with 45 out of 65 turbines already in place. Once completed, it will deliver 400 MW of electricity to Rhode Island and 304 MW to Connecticut, enough to power over 350,000 homes across both states.
As Ørsted navigates these turbulent waters, the implications of the stop-work order may resonate throughout the offshore wind industry, raising concerns about future investments and project viability. The company’s ability to rebound from these setbacks will depend on strategic responses to both regulatory challenges and market dynamics, as it continues to play a crucial role in the global transition to renewable energy.
