Production halt for Ørsted's offshore wind farm Revolution Wind has made a big dent in Danish Ørsted's shares on Monday. Thus, the shares plunged by 16.4 percent to 179 kroner at the close of trading on Monday. This is the share's lowest closing price ever. With a price of 179 kroner, the shares have lost around 45 percent of their value since the new year.
This comes after the company announced on Saturday night that it has been ordered to stop work on the offshore wind farm Revolution Wind, which is being built off the American east coast. It is the US Department of the Interior, through its Bureau of Ocean Energy Management (BOEM), that has imposed the production halt.
It is unknown how and when work will be able to resume. Ørsted writes in a press release that it is in dialogue with the authorities with the aim of getting construction started again as soon as possible.
Revolution Wind consists of 65 offshore wind turbines and is located off the state of Rhode Island. According to Ørsted, all foundations are ready, and 45 of the turbines have been fully assembled. In the best case scenario, the offshore wind farm could be put into operation as early as next year.
The governors of Rhode Island and the neighboring state of Connecticut have protested against the construction halt, arguing that Boem needs time to investigate whether the project threatens national security.
US President Donald Trump has made it clear both in the run-up to last year's presidential election and after his inauguration in January this year that he is opposed to renewable energy.
The share price plunge comes two weeks after Ørsted shares lost almost 30 percent of their value when the company announced that it would carry out a capital increase of 60 billion kroner.
The energy company Equinor, which has been in a similar situation, has announced that it will help Ørsted get construction of the offshore wind farm underway as soon as possible. Equinor, which is headquartered in Norway, was met with a construction halt on the Empire Wind offshore wind farm in April. It is currently being built off the coast of New York State.
Here, after negotiations with the American authorities and with the help of the Norwegian Minister of Finance, Jens Stoltenberg, it was possible to lift the construction freeze a month later.
However, Equinor is not doing this for purely friendly reasons. The company owns almost ten percent of Ørsted and therefore also has a great interest in Revolution Wind being completed as soon as possible.
It is unknown to what extent the Danish state, which owns 50.1 percent of Ørsted, will participate in negotiations.
However, it does not change the fact that the state is still prepared to invest 30 billion in the company in connection with the capital increase that is in the pipeline.
The Ministry of Finance tells the news agency Reuters in a comment on the latest development that it is within the risk profile that was the basis for participating in the capital increase.
/ritzau/
Text, graphics, images, sound, and other content on this website are protected under copyright law. DK Medier reserves all rights to the content, including the right to exploit the content for the purpose of text and data mining, cf. Section 11b of the Copyright Act and Article 4 of the DSM Directive.
Customers with IP agreements/major customer agreements may only share Danish Offshore Industry articles internally for the purpose of handling specific cases. Sharing in connection with specific cases refers to journaling, archiving, or similar uses.
Customers with a personal subscription/login may not share Danish Offshore Industry articles with individuals who do not themselves have a personal subscription to Danish Offshore Industry.
Any deviation from the above requires written consent from DK Medier.
