Orsted's Decline Highlights Woes Ailing Wind Power Industry

Orsted A/S, once valued more highly than BP Plc, has seen its stock price drop due to abandoned projects, job cuts, and lowered financial targets. The company blames the Trump administration for ruining its business plans, but its problems existed before President Trump was in office. Orsted's focus on offshore fields and lack of a diverse portfolio make it vulnerable to government price guarantees. The wind power sector is facing challenges due to cost inflation, high interest rates, and supply chain issues, causing a slowdown in global wind generation growth.

Orsted A/S, once a darling of the wind power industry and valued more highly than BP Plc, has seen its stock price plummet in recent years. The Danish energy giant has abandoned projects, cut jobs, and lowered its financial targets, leading to a stock price that has fallen below its initial public offering price [1]. On Monday, Orsted announced plans to raise up to 60 billion Danish kroner ($9.4 billion) via a rights issue, more than half of its market capitalization.

Orsted attributes its woes to policies limiting offshore wind under the Trump administration, which hindered its ability to raise funds for projects like the Sunrise Wind project off the coast of New York [1]. However, the company's problems predate the Trump presidency, suggesting deeper issues at play. For instance, Chief Financial Officer Trond Westlie's admission that he doesn't know the company's net debt offhand highlights potential governance gaps [1].

Orsted's focus on offshore fields and the decision to sell its European onshore wind business have left it vulnerable to government price guarantees [1]. The wind power sector is facing broader challenges, including cost inflation, high interest rates, and supply chain issues, which have slowed global wind generation growth [1]. For example, total turbine orders fell 50% in the second quarter of 2025 compared to the same period last year, according to Bloomberg NEF [1].

Moreover, the wind industry has potentially made strategic missteps. While larger turbines can generate more power, they also introduce new challenges and require more expensive components, leading to supply chain pressures [1]. This trend has hindered efforts to establish robust supply chains, with installation vessels becoming redundant before they could break even [1].

Orsted is receiving significant support from its majority stakeholder, Denmark, which has pledged to provide over half of the funds for the rights issue. However, this capital injection has drawn criticism from opposition parties, who argue that it is a government bailout [1]. While subsidies will continue to play a crucial role in achieving a timely green transition, there are limits to goodwill, and taxpayers may grow unhappy if governments continue to prop up developers making poor strategic decisions [1].

Orsted's struggles serve as a reminder that achieving a sustainable energy transition requires not just being a renewables company but also being good at business [1]. As the wind power industry navigates these challenges, it will be crucial to address fundamental issues, such as governance, strategic focus, and supply chain management.

References:
[1] https://www.bloomberg.com/opinion/articles/2025-08-13/orsted-is-symptomatic-of-what-s-ailing-the-wind-power-industry