Danish Clean Energy Giant Sucking Wind

AP Photo/Michael Dwyer, File

Woof, the news just keeps getting grimmer and grimmer for Danish offshore energy behemoth Ørsted...and it's great.

Thanks to a heads-up this morning from HotAir regular John Clark, I have had an encouraging time digging into what's looking damn near like a collapse of one of the biggest names in the wind farm business. It bodes some serious ill for the entire sector.

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You all know from reading my posts that Ørsted has had a miserable twelve months, thanks to a number of circumstances. Most of them stem from contracts agreed to based on overconfidence in continued government largesse, cheap financing, low inflation, and uninterrupted supply chains. As you well know, all of those came apart this year. 

While inflation has mitigated somewhat, thanks to Ukraine, lingering effects of the pandemic, the Panama drought, and recently the Middle East, supply chain issues are a constant thorn in manufacturers' sides. In the wind industry, the issue is exacerbated by the multitude of warranty repairs almost every firm is facing. Inflation has pushed core prices up, and financing for projects has become scarce and expensive for projects that had already been bid and signed for under much more favorable conditions.

Many are too expensive at current rates to even begin. If local boards controlling utility rates will not renegotiate to substantially raise the purchase price of electricity generated by the completed wind farm from what had been contractually agreed upon, developers are walking away, even in the face of huge penalties. 

Which is what Ørsted did from both of their planned New Jersey offshore wind farms as well as from their partnership with the state of Maryland (although, in this case, they're still looking for private investment - and bad luck to them).

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...It seems that has come to pass after a fashion. What Ørsted did yesterday was pull out of its contract for electricity with the state of Maryland because the rates they’d agreed to initially were now too low to pay for the project.

...I’m not sure if the governor of MD is willing to go to the lengths NJ’s Murphy is to retain wind farms – after all, Murphy is the one who gave away taxpayer federal credits to Ørsted in a desperate under-the-table deal to try to massage the company into staying – when MD has a 100% renewable power goal set for 2030 or something equally as ludicrous.

Sometimes the balance for this "cheap Green energy" is so ridiculously out of whack, even a governor raping his own citizens' tax credits isn't enough payola to keep turbines going up.

Shouldn't that be telling someone something? You'd think. Why are we the only ones who see the obvious?

Knowing all that, it was still kind of a shocker to see the tweet John tagged me on this morning.

THAT'LL LEAVE A MARK

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Ørsted is basically curling into the industrial version of a fetal ball.

...Ørsted, which is behind the £8bn Hornsea 3 project off the Yorkshire coast, said on Wednesday it planned to axe up to 800 jobs, pull back from markets in Spain, Portugal and Norway, and suspend dividend payments to shareholders covering the 2023-25 financial years.


The company said it would cut its target for developing renewable energy capacity by 2030, reducing it from 50 gigawatts to 35-38GW.

Its chair, Thomas Thune Andersen, will step down after almost a decade in the role, after the two senior executives who left the business in November.

The company, which is majority owned by the Danish government, said the “reset plan” was designed to make it a “leaner and more efficient company”.

It's going to be leaner, but efficiency is in the eye of the beholder and their now-boned stockholders.

They are the poster children at the moment for problems that are industry-wide. For example, Siemens, still breathing purely thanks to German government cash last summer, only reported a profit because they sold shares in another division. That's not their turbines making them money. Siemens is dumping assets or liabilities. Their wind business is not viable.

...Separately on Wednesday, the turbine maker Siemens Energy, which was forced to strike a €15bn (£12.8bn) rescue deal with the German government last year, reported a €1.58bn first-quarter profit after selling a stake in its Indian unit.

It said orders remained lower than forecast in its turbine division, where newer models have suffered technical faults, but it hoped to break even in that business in 2026.

...The problems affecting the windfarm industry caused the Swedish energy firm Vattenfall to stop work on the multibillion-pound Norfolk Boreas windfarm last year because it was no longer profitable.

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If "Green" energy doesn't find some way to become profitable and, quite frankly, prove it can stand on its own, it could soon lose whatever investment support it had, too. 

Exchange Traded Funds (ETFs) that handle "Green energy" stocks have been in what's been politely called a "bloodbath."  People will take their hard earned money to other funds if this trend keeps up.

I haven't begun to mention the rising tide of organized citizen protests against these projects across the country and at whatever stage of development. The more the American people learn about what a boondoggle pipe dream they've been sold - and mind you, they are learning more every day - the more enraged they become. And the more the word spreads.

Considering how there is nothing - and I do mean nothing - renewables can do to ever replace the reliable power generation capacity of nuclear or fossil fuels, even with the decades of tremendous expenditures of taxpayer and ratepayer funds they've had already washing over them?

There are far better and safer bets, and I'm not blowing...smoke.

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Ed Morrissey 11:27 PM | July 13, 2024
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