Green Power Demand in the U.S. Remains Strong

By Jacob Gronholt-Pedersen and Stine Jacobsen
COPENHAGEN (Reuters) – Demand for green power in the United States will grow regardless of the next president, according to wind energy leaders Vestas and Orsted.

Challenges Facing Offshore Wind Developers

Offshore wind developers have faced profit declines due to:
– Rising raw material costs
– High interest rates
– Inadequate grid connections
– Supply chain issues
– Competition from China

As a result, companies like BP and Equinor are scaling back their ambitions. In the U.S., the developing offshore wind industry has seen canceled projects, delayed lease sales, and accidents, particularly at the first major offshore wind project.

Orsted reported construction problems and increased costs in one of its large U.S. offshore wind projects.

Political Implications

Democratic Vice President Kamala Harris supports aggressive offshore wind targets aligned with President Biden’s administration. In contrast, Republican candidate Donald Trump has promised to eliminate offshore wind projects, claiming environmental damage and wildlife fatalities as concerns.

Orsted’s CEO Mads Nipper pointed out that demand is rising due to reshoring and tech industries and emphasized that all forms of energy will be needed regardless of political outcomes.

Market Reaction

Vestas, the leading wind turbine manufacturer, saw shares drop over 10% following warnings of reduced profit margins for the year. CEO Henrik Andersen reassured analysts that the election outcome won’t impact order intake, as the demand for new green electricity exceeds supply, particularly for data centers.

Orsted, meanwhile, faced significant impairments last year for canceled U.S. projects, affected by inflation and supply chain issues. Their operating profit fell 14% to 4.44 billion crowns, below analyst expectations. Despite a slight year-to-date increase, shares are down over one-third from early 2021 peaks.

> Note: ($1 = 6.8472 Danish crowns)