The head of the Danish Shareholders’ Association posed several questions to Orsted’s management as investors gathered in Copenhagen last Friday to vote on the troubled offshore wind company’s plans to tap them for $9 billion (€7.7 billion).
Would the company – whose bet on the US has turned sour – need further cash injections in the future? Was Orsted’s top team up to the job? “Thousands of Danish shareholders deserve ... clarity,” said Mikael Bak, the association’s chief executive.
Shareholders gave management the benefit of any doubt this time and approved the plan to raise three-quarters of the company’s market value in new capital, the terms of which will be set out in an upcoming prospectus.
It should give the Copenhagen-listed company the funds to finish its 924-megawatt Sunrise Wind development off the New York coast, despite being unable to sell a stake in the project amid US government hostility to the industry, and the rest of the 8.1 gigawatts of offshore wind it is building in the US, UK, Poland and Taiwan.
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But with US President Donald Trump continuing to rail against the sector, and the era of rock-bottom interest rates that fuelled the industry’s growth at an end, Orsted executives indicated the company was unlikely to keep to the global ambitions that made it the world’s largest offshore wind developer.
Instead of the aggressive expansion that transformed Orsted from an oil and gas driller into a green industry champion – while pushing the rest of the industry forward – it is narrowing its focus to finish the development under way and looking to Europe for any future mega projects.
[ Danish energy firm Orsted begins construction of Cork solar farmOpens in new window ]
It is also pulling back from areas such as onshore wind and hydrogen and seeking to hold a larger slice of its projects than previously, while boosting its power trading division.
This marks an evolution from the “build, sell down, build” model that propelled Orsted’s expansion, and raises questions about the growth of the offshore wind and renewables industry despite global decarbonisation goals.
“The future Orsted will primarily allocate capital to offshore wind in Europe,” its chair Lene Skole told shareholders.
Industry costs have grown sharply in recent years as interest rates rose and suppliers rebelled after a long period of squeezed margins, causing problems for several offshore wind farms being built and harming political support.
What can we potentially look forward to in Budget 2026?
Orsted abandoned two US projects in 2023, before Trump was re-elected, triggering multibillion-dollar writedowns and accelerating a share price slide, which has reached almost 80 per cent over the past five years.
Completing the projects under way should help Orsted restore its finances, bringing in roughly DKr11bn ($1.7bn) to DKr12bn of earnings before interest, tax, depreciation and amortisation annually from 2028, and adding to the 18.5GW of renewables it has developed around the world, of which it now owns a 12GW share.
That portfolio is one factor persuading investors to stick with the company, regardless of prospects for growth beyond the current buildout. Orsted has said it planned to resume dividends next year, having suspended them in 2024.
Charles Lemonides, chief investment officer at hedge fund ValueWorks, an Orsted investor, said: “They’ve put up windmills around the world and they’re generating electricity and cash flows, and those assets are worth money regardless of what Donald Trump says.”
But completing the current build is no small order. The US government in August ordered Orsted to stop work on its $1.5 billion Revolution Wind development off Rhode Island, which is about 80 per cent complete. Orsted is challenging the ban in the courts.
The Danish government, which owns 50.1 per cent of Orsted, was also lobbying the Trump administration to soften its approach to the industry, said people familiar with the matter, mindful of the damage it may do to Danish companies across the supply chain.
Yet Copenhagen’s efforts may have to be redoubled. “There isn’t a future for offshore wind because it’s too expensive and not reliable enough,” Trump’s interior secretary Doug Burgum told the Gastech conference in Milan this week, saying the administration was taking a “deep look” at each of the current projects under construction.
[ Danish group Ørsted to spend €90m on latest Irish wind farmOpens in new window ]
Revolution Wind and Sunrise Wind account for about 20 per cent of the offshore wind capacity Orsted is building. As well as fending off Trump, the company also needs to raise further cash to fund its programmes by selling off its European onshore wind business as well as stakes in two major projects in Taiwan and off the east coast of the UK, testing the appetite of offshore wind investors.
Orsted, which announced 800 job cuts in 2024, is also weighing further spending reductions, with announcements planned for later this year. “We’re in the process of right-sizing our organisation to the reality we’re in,” said Rasmus Errboe, chief executive.
He pledged a “value over volume” approach to new projects, highlighting the potential for the technology in Europe, where politicians want to expand capacity from about 37GW to at least 300GW by 2050 to meet decarbonisation goals. About 1GW of offshore wind can supply electricity for 1mn homes.
The decision by Norway’s state-controlled energy company Equinor to take a 10 per cent stake in Orsted last October raises the prospect of closer industrial tie-up between the Scandinavian nations. Equinor will subscribe to the rights issue and nominate a director to Orsted’s board.
But the rising costs and supply chain strains has tempered some of the optimism in Europe. Developers have shunned recent auctions for new projects in Denmark and Germany, while the opposition Reform UK party, which leads British opinion polls several years away from a general election, has threatened to withdraw state support.
One of Orsted’s wind farms in Germany stands idle as its grid connection is not ready, while demand for the electricity produced is subdued partly because of high costs and technical challenges.
“Electricity demand is not as big as we expected it to be at this stage,” said Giles Dickson, outgoing chief executive of the WindEurope trade group.
[ Offshore wind runs into rising costs and delaysOpens in new window ]
“A few years ago, heavy industry in the Netherlands was saying to us, ‘please build offshore wind farms now, we want to electrify’. Then heavy industry realised it was actually very difficult to electrify [and] the business case wasn’t there.”
Despite the uncertain future, some shareholders take a forgiving view.
“Orsted has had missteps for sure,” said Lemonides of ValueWorks. “But they’ve also done more to advance this industry than anybody else. Part of being a leader is sometimes you hit roadblocks.” – Copyright The Financial Times Limited 2025
