"Vineyard Wind, country's first large-scale offshore wind project, finishes construction"

From WBUR-Boston, March 14:

After years of starts and stops, workers installed the final blades on the last turbine Friday evening to complete Vineyard Wind, the country's first large-scale offshore wind project.

It will be at least several weeks until all 62 turbines in the wind farm off the coast of Massachusetts are fully up and running, generating power for the New England grid. Still, the end of construction is a milestone for the project and the U.S. offshore wind industry, which has faced years of economic and political headwinds.

Gov. Maura Healey said she was "thrilled" to learn construction was complete, noting that the project is expected to save Massachusetts ratepayers $1.4 billion over the first 20 years of operation.

"The affordable, homegrown power it delivers to Massachusetts residents and businesses will bring costs down as President Trump throws global markets into disarray," she said in a statement.

As the first large offshore wind project to go through the cumbersome federal permitting process, all eyes have been on Vineyard Wind from the beginning. Whether it would reach this point was not a sure bet.

Construction has been pushed back several times, beginning in 2019 under the first Trump administration. In 2024 a turbine blade snapped and debris washed up on the shores of Nantucket, causing months of delay. And just three months ago, when the project was 95% complete, the U.S. Interior Department issued a stop-work order.

But with a stretch of good weather offshore, the developers behind the $4.5 billion project managed to get over the finish line.

The next step is what's called commissioning — the complicated process of connecting turbines to the grid and ensuring they work properly. In an earnings call earlier this week, Iberdrola, the parent company of Avangrid, one of the project's co-developers, told investors that 52 of the 62 turbines are authorized for operation.

A spokesperson for Vineyard Wind declined to say exactly how many turbines are generating power, but in late January, the company said in court documents that 44 turbines were operational. When fully online, the wind farm will be capable of producing 800 megawatts, enough electricity to power about 400,000 homes in the region.

As Vineyard Wind finished construction Friday evening, the wind developer Ørsted announced that some of its turbines in the Revolution Wind project near Rhode Island were sending power to the grid for the first time. That project is nearly complete as well, and will eventually be capable of powering up to 350,000 homes....

....MUCH MORE 

Wind: "Apollo Grows Europe Energy Bet With $6.5 Billion Orsted Deal"

As the old-timers used to say: "Well-bought is half sold." 

From Bloomberg, November 4:

Apollo Global Management Inc. agreed to invest $6.5 billion in a huge Orsted A/S offshore wind farm in the UK, the latest in a string of major European energy deals for the US private equity firm.

The investment is a vote of confidence in Orsted as it works to complete a series of large projects and refocus on Europe following costly setbacks in the US. Hornsea 3 is Orsted’s biggest wind farm under construction, making its successful delivery key to the company’s recovery and future growth.

Shares in the company were little changed in Copenhagen as the company had flagged that a deal would likely happen this year.

“The farm-down of Hornsea 3 is an extremely important turning point in the recovery of Orsted’s finances, together with the successfully completed capital increase,” Jacob Pedersen, head of equity research at Sydbank A/S, wrote in a note.

The so-called farm down was part of a divestment program planned by chief executive, Rasmus Errboe, when he took over the company to try to turn it around. The plan was overtaken by events in the US that sent the company into crisis mode. Orsted’s management will be hoping that the deal shows the start of a return to normality for the company after the completion of a $9.4 billion capital raise last month....

....MUCH MORE 

Related, October 2:

"Offshore Wind Is a Mess. A Hedge Fund Sees the Perfect Time to Buy"  

And the outro from same:

Not just hedge funds: 

Private Equity - "Ørsted in talks to sell 50% stake in flagship U.K. offshore wind project to Apollo - FT"

Oil & Gas -  Nordic Solidarity: "Equinor to Subscribe for Orsted Shares Worth Up to $939 Million in Rights Issue"

"Offshore Wind Is a Mess. A Hedge Fund Sees the Perfect Time to Buy"

From Barron's, September 30:

Hedge fund founder Charles Lemonides is making a bet on an industry most investors wouldn’t touch today: offshore wind.

Under President Donald Trump, the outlook for almost every kind of renewable energy is bleak, but offshore wind is in the worst shape of all. Trump calls the industry a scam and wants it stopped in its tracks. His administration has revoked permits for projects, pulled back money for port upgrades, and stopped new leasing and permitting. Officials have even halted projects that were in the middle of construction.

Most investors abandoned the offshore wind industry when Trump was elected, and have stayed away since. But Lemonides, the chief investment officer and founder of the New York hedge fund ValueWorks, sees a buying opportunity.

While several companies have invested in offshore wind projects, including European energy company Equinor and the investment firm BlackRock, the only real pure-play stock in the industry is Orsted, a Danish firm that develops wind projects around the world. Lemonides has been buying Orsted shares, and plans to invest in a rights offering where the company is selling even more equity to existing shareholders.

Orsted stock trading in Denmark is down 64% this year.

“We try to buy growth stocks at value prices,” he said in an interview. “Orsted used to be perceived as a great growth stock, and I think it will be perceived that way again.”

ValueWorks owns about $10 million worth of the stock, a stake Lemonides began amassing in July. His bullish case is based largely on the value of Orsted’s non-U. S. assets. As of last year, the company was working on more than twice as many projects outside the U.S. as it had in the U.S. Even if Lemonides values the U.S. assets at zero, the overseas assets are worth much more than the entire value of the company today, he said.

The headlines about offshore wind may be scary, but “you typically get stuff cheap when that happens,” he said.

Indeed, Orsted’s stock chart shows signs of panic selling at several moments this year. In late August, Orsted shares plunged after the Trump administration suddenly ordered construction to stop on Revolution Wind, an offshore project near Rhode Island that Orsted owns along with a unit of BlackRock. The project was about 80% complete....

....MUCH MORE 

Not just hedge funds: 

Private Equity - "Ørsted in talks to sell 50% stake in flagship U.K. offshore wind project to Apollo - FT"

Oil & Gas -  Nordic Solidarity: "Equinor to Subscribe for Orsted Shares Worth Up to $939 Million in Rights Issue"

"Ørsted in talks to sell 50% stake in flagship U.K. offshore wind project to Apollo - FT"

A quick hit from Seeking Alpha via MSN:

Ørsted (OTCPK:DNNGY) is in talks to sell a 50% stake in its £8.5 billion Hornsea 3 wind farm off the U.K. east coast to Apollo Global Management (APO), the Financial Times reported Friday, as the world's largest offshore wind developer tries to shore up its balance sheet.

Ørsted (OTCPK:DNNGY) launched a sale process for Hornsea 3 late last year and said in August that it had found a preferred bidder for the stake, without revealing the identity; the FT report now says the negotiations are with Apollo (APO)....

....MORE 

Ørsted seems to be making the right moves, cutting exposure here and in Korea, shoring up the balance sheet with cash etc. It might me late, as evidenced by the 67% discount that was required in the recent rights offering but it does seem to be planning to be around for a while.

For what it's worth the shareholders approved the rights offering and one of the larger existing shareholders seemed to like the pricing:

Nordic Solidarity: "Equinor to Subscribe for Orsted Shares Worth Up to $939 Million in Rights Issue"

Wind: Ørsted Shares Crash Below (2016) IPO Price On "Unexpected" Rights Issue

Someone seems to be missing their ⌀. I put it in the headline but am too lazy to replace it in the text. 

From ZeroHedge, August 11:

Shares of Danish company Orsted A/S crashed the most on record after the wind developer announced a rights offering of up to 60 billion kroner ($9.4 billion). The offering aims to stabilize its finances, which have been hit hard by soaring costs, supply chain disruptions, and President Trump's rollback of "green" energy projects. 

Orsted shares plunged 29%, falling below their 2016 IPO price after the company announced the largest share offering in the European energy sector since Enel SpA in 2009. The capital raise is an attempt by the CEO to shore up finances as the entire green energy sector comes under severe pressure in the era of Trump and common-sense energy policies. 

With wind farm construction as its core business, Orsted has been exposed to more canceled projects than any of its industry peers, including ones in the US and the UK. The funding gap swelled after scrapping a stake sale in the Sunrise Wind project off New York. 

Orsted also announced the sale of its European onshore wind unit, targeting 35 billion kroner from divestments by next year, and plans to invest 145 billion kroner from 2025-27 while maintaining an investment-grade rating and resuming dividends in 2026. Full-year EBITDA guidance remains at 25 to 28 billion kroner, though offshore wind targets were cut due to weaker wind speeds.

"Orsted and our industry are in an extraordinary situation with the adverse market development in the US on top of the past years' macroeconomic and supply chain challenges," CEO Rasmus Errboe said in a statement.

Commenting on the rights offer, Goldman analysts led by Alberto Gandolfi told clients that Orsted's offering was "largely unexpected, with clarity expected by mid-September… but also a clean-up move."

Gandolfi explained more:

Orsted has just announced the intention to carry out a DKK 60 bn rights issue (c.€8 bn), equivalent to around 45% of its market capitalisation. Although not totally unexpected to us – in our recent report (here), we flagged execution risks on disposals and FCF headwinds from rolling incentives – we believe this would come as a surprise to most of the Sell Side. Given the size, the rights issue would be highly dilutive, and hence we believe could lead to a swift drop in the share price. We also note that we have not seen the terms of the rights issue, and the terms (based on the H1 investor presentation available on Orsted website) would be disclosed in the first half of September, thus implying 3-4 weeks of market uncertainty. On the other hand, we highlight that once completed, this would most likely represent a "clean up move" as we would expect the resulting B/S (post rights issue) to be solid. As a reference, consensus YE Net Debt currently stands at DKK 75 bn on Bloomberg, and we project 2025 EBITDA at DKK c.28 bn. A restored B/S strength would put less pressure on Orsted to divest assets (current plan implies DKK 40 bn pending disposals). Lastly, we also flag that, pre raise, Bloomberg consensus P/E for 2026 is a mere 12x; the stock would therefore not be on an overly high P/E even post rights. We remain Neutral rated.

The analysts maintained a "Neutral" rating on the stock with a 300-kroner 12-month price target....

 

....MUCH MORE, more analysts weigh in.

Earlier this morning we saw a headline quoting Nordnet's Per Hansen describe the situation as:

“It's an utter disaster”

And the thing is, this didn't sneak up on the market, it has been apparent for at least three years. 

November 2023 -  "Wind industry deals with blowback from Ørsted scrapping 2 wind power projects in New Jersey"

Previously:

"Offshore Wind Developers Likely to Cancel Some Contracts After NY Decision"

Ørsted CEO Says U.S. Offshore Wind Targets Not Out of Reach

"The first US offshore wind auction in the Gulf of Mexico was a dud"

Although we didn't focus on it in August 30's "Ørsted, "World's Largest Offshore Wind Farm-Maker Crashes Most On Record After Catastrophic Results"", during that same conference call Ørsted said it considered abandoning their big offshore New Jersey wind farm but will stick with it, for now.  

They seemed to be doing better back when they were DONG Energy.

November 2023 - "How the U.S. Market Went Sideways for a Wind-Power Giant"

August 2024 - "Ørsted Takes $500 Million Hit Led by Connecticut Wind Delay"

"King Charles’ Crown Estate to invest £400m in offshore wind supply chain"

THE stately Turbines of England,
   How beautiful they stand!
Amidst their tall ancestral trees,
   O'er all the pleasant land.
The deer across their greensward bound
   Thro' shade and sunny gleam,
And the swan glides past them with the sound
   Of some rejoicing stream. 

(of revenue)

—Felicia Browne Hemans
Blackwoods Magazine April, 1827

I wish Noel Coward were around to comment:

The stately homes of England,

How beautiful they stand,

To prove the upper classes

Have still the upper hand.

From CityAM, June 17:

King Charles III’s property firm is to invest up to £400m of fresh capital into the UK’s offshore wind supply chain, it has been announced.

The Crown Estate has earmarked £350m for investment into the construction of a new port and supply chain infrastructure it said would support “accelerated delivery of UK offshore wind projects.”

The other £50m will support “early-stage project development,” delivered via a succession of funding rounds.

Investment from The Crown Estate, which manages a £16bn portfolio of land and owns the UK’s seabed, is a big boost for the government as it looks to decarbonise the grid by 2030.

Energy Secretary Ed Miliband has suffered a succession of blows in recent months, including the abrupt termination of Ørsted’s contract at Hornsea 4, one of Britain’s biggest-ever offshore wind farms if completed....

....MUCH MORE

The first time we used the Hemans pastiche was in 2011's "Noblesse Oblige: "The aristocrats cashing in on Britain's wind farm subsidies"" 
Okay, it's not Oblige, it's more like Noblesse, Score!!!

Related:

February 2008 -  Queen Elizabeth: Offshore wind farms to generate £100m windfall for Crown Estate 

April 2023 -  Charles III, King Of England, Had Gas

August 2023 - How King Charles III Came To Own The Seabed

And not really related but possibly of interest, July 2021: 

Who Owns England: "The Marquesses and their 100,000 acres" 

There is only one Marquess in the English Peerage the rest are either in the Peerage of the U.K or the Peerage of Great Britain. I was always under the assumption that the Marquesses were all subsidiary titles for Dukes but apparently not. Be that as it may be, they all seem to have nice houses....

I would have made a good marquess.

But the closest I could have gotten was Count [Earl]; unfortunately the lack of primogeniture, and descent in the female line put the kibosh on that career move.

Dear President Trump, This Would Be A Good Time To Invade Greenland

The blue-eyed colonizers are in disarray. With the collapse of former standard-bearer Ørsted and competition coming to Novo Nordisk the country has little chance of rebuilding its military. So no need for any Dane-geld.*

From ¡No pasarán!, January 10:

The Systematic Destruction of Denmark's Military Over 30 Years: "Ships that cannot sail; Planes that cannot fly; And cannons that cannot fire — Everything is missing" 

Unfortunately for Denmark, the kingdom's position in relation to Donald Trump and Greenland is unlikely to be improved by the book that was published last November, Defenceless (When the Biggest Threat Comes From Within). (Mange tak for the Instalink, Sarah.)

Sjællandske Nyheder has spoken with Peter Ernstved Rasmussen:

Editor and founder of the online media OLFI, the former reserve officer in the Danish Life Guard, Peter Ernstved Rasmussen, is known as a man who dares to speak out. Especially when it comes to the contents of his heart, Denmark's defense.

And there is little doubt that he does that in ‘FORSVARSLØS - Når den største trussel kommer indefra’, published by Lindhardt & Ringhof. 

The subject of the book is what Peter Erntsved Rasmussen calls the systematic destruction of the kingdon's Defense for more than 30 years.

"Today it consists of ships that cannot sail. Planes that cannot fly. And cannons that cannot fire. Everything is missing, from soldiers, air defense, artillery, anti-aircraft defense, submarines, tanks, night combat equipment, weapons, ammunition, radios, and binoculars to things as banal as socks, notebooks, and printer paper," he writes in a press release, where he also addresses who is to blame for the Armed Forces' miserable condition.

"The book describes a national tragedy that could only be made possible because successive prime ministers, finance ministers, defense ministers, department heads, defense chiefs and top officers lied with open eyes, manipulated and withheld the truth about the state of the Armed Forces — and at the same time tried to convince the population that we had the world's best defense."

 … [Incidentally, the film 'The Post' about the Pentagon Papers] has many parallels to the situation in the Danish defense and to the book 'FORSVARSLØS', adds Peter Ernstved Rasmussen....

....MORE 

*Bringing to mind the thoughts of a now disreputable English writer:

Dane-geld  

A.D. 980-1016

IT IS always a temptation to an armed and agile nation
    To call upon a neighbour and to say: —
"We invaded you last night — we are quite prepared to fight,
    Unless you pay us cash to go away."

And that is called asking for Dane-geld,
    And the people who ask it explain
That you've only to pay 'em the Dane-geld
    And then you'll get rid of the Dane!

It is always a temptation for a rich and lazy nation,
    To puff and look important and to say: —
"Though we know we should defeat you,
we have not the time to meet you.
    We will therefore pay you cash to go away."

And that is called paying the Dane-geld;
    But we've proved it again and again,
That if once you have paid him the Dane-geld
    You never get rid of the Dane.

It is wrong to put temptation in the path of any nation,
    For fear they should succumb and go astray;
So when you are requested to pay up or be molested,
    You will find it better policy to say: —

"We never pay any-one Dane-geld,
    No matter how trifling the cost;
For the end of that game is oppression and shame,
    And the nation that plays it is lost!"

—Rudyard Kipling, 1911

"Ørsted Takes $500 Million Hit Led by Connecticut Wind Delay"

From Bloomberg via gCaptain, August 15:

Orsted A/S booked an impairment of more than $500 million related to an offshore wind farm in the US and a canceled green hydrogen plant in Sweden. 

The action shows that Chief Executive Officer Mads Nipper’s turnaround plan for the Danish wind developer still has some way to go before bearing fruit. In total, the firm took a hit of 3.9 billion Danish kroner ($580 million) in the second quarter, including from delays at the Revolution Wind project off Connecticut and Rhode Island. 

Shares fell as much as 9.3% in Copenhagen, the biggest drop since November. 

It’s the latest sign of trouble for the nascent US offshore wind market that’s been a key part of President Joe Biden’s plans to decarbonize the American power grid. Orsted had to cancel two major projects in the US last year after delays and supply chain issues added unmanageable costs. The latest trouble shows developers still can’t predict all costs in this first generation of major projects. 

“It is frustrating and unsatisfactory,” Nipper said on a call with journalists Thursday morning. “Risk is an integrated part of projects. The early stage US market is hit harder than anywhere else.”

The firm is one of the world’s biggest renewable power developers, focusing primarily on offshore wind. Its projects are key to help the European Union meet its climate goals. The company developed the first offshore wind park in Denmark in the 1990s....

....MUCH MORE

Most recently (Aug. 11): Watch Out Elon: "Ørsted partnership to develop 1GW battery storage across US Midwest"

Watch Out Elon: "Ørsted partnership to develop 1GW battery storage across US Midwest"

Everybody wants to get into the act.

From Power Technology, August 9: 

The collaboration marks Ørsted’s entry to standalone battery storage in the US and globally.

Danish energy company Ørsted has partnered with Mission Clean Energy to develop four standalone battery energy storage systems with 1GW capacity across the US Midwest.

The collaboration marks Ørsted’s entry into standalone battery storage in the US and globally, enhancing its renewable energy portfolio.

The Danish energy company will deploy its capital to secure and sustain priority positions in the interconnection queue for its storage projects. Meanwhile, Mission Clean Energy will maintain its leadership role in driving the development of these initiatives.

Both companies have submitted interconnection applications for the projects within the Mid-Continent Independent System Operator (MISO) Central and North regions....

....MUCH MORE

First Solar As Meme Stock (FSLR)

It's the action since last week that seemed inexplicable:

TradingView

The earlier jump was on nice words from Piper Sandler's analyst on May 21st and then the next day at Barron's*, the latest grind higher on no news. 

And from the FT's Moral Money newsletter, a headline and then a quick hit, June 7:

First Solar is the clean tech sector’s meme stock bet
Also in today’s newsletter, majority of Europeans polled willing to pay for climate action  

 retail trading
....First Solar bucks clean tech sector trend with soaring share price

“Who is making money in renewable energy?”

It was a question posed to a group that included chief executives, investors and your Moral Money correspondent.

It is a fair question. Sustainable investing is languishing, in large part because of poor performance by renewable energy companies. Earlier this year, Ørsted was forced to suspend its dividend and cut jobs and development plans. Smaller renewable energy companies are struggling to raise money from private equity funds that are wary of the risks.

But executives at First Solar are rolling in cash. The solar-panel maker’s shares are up 60 per cent so far this year and closed at $273 on Thursday. Chief executive Mark Widmar cashed out $10mn as the solar-panel maker’s share price soared more than 40 per cent in the past month. It is one of the largest single-day stock sales by a US chief executive in the past six months, according to VerityData. The company’s chief financial officer Alex Bradley cashed out $4.4mn in late May, the 10th-largest sale of the year for a US chief financial officer.

First Solar has benefited from the Biden administration’s China tariff announcements. But it has also been swept up in the “meme stock” phenomenon. This retail trading surge catapulted shares of a handful of companies — most notably GameStop — thanks to mentions on Reddit’s WallStreetBets thread.

On Thursday, GameStop’s shares surged nearly 50 per cent after Keith Gill, the “meme stock” investor known as Roaring Kitty, scheduled a livestream session on YouTube set for 12pm ET today.

First Solar is one of a handful of other stocks that are frequently discussed on WallStreetBets.

“The magnitude of the recent move is difficult to justify and points to a potential benefit from WallStreetBets,” Morningstar analyst Brett Castelli told me.

Meme stocks are extremely volatile and buying can vanish in a flash. Renewable energy company Plug Power had its own rollercoaster ride in May, according to Morningstar. But Plug Power’s shares have dropped in recent days.

For now, First Solar executives are definitely making money in renewable energy — even if it turns out to be a meme mirage. (Patrick Temple-West)....

Much More on various topics

Huh.
*"First Solar gets price target lift from Piper Sandler, UBS" (FSLR)

 First Solar Leads The S&P 500 Gainers, Up $39.64 (+18.69%) FSLR

The stock is up 48% over the last month, up 4.29% (+$12.00) on the day. $291.80 last and closing in on that long-ago all-time high, $317.00 on May 14, 2008.

JPMorgan, Ørsted Close $680MM Tax-Equity Financing Solar/Storage Deal

From Ørsted, May 23:

Ørsted Closes $680 Million in Tax Equity Financing for Solar and Storage Portfolio 

Today, Ørsted, a leading U.S. clean energy developer, announced an investment from J.P. Morgan for $680 million in tax equity financing for a portfolio of solar and storage assets in Texas and Arizona. The project portfolio consists of Eleven Mile Solar Center, a 300 MW solar and 300 MW /1200 MWh storage project in Pinal County, Arizona and Sparta Solar, a 250 MW solar project in Mineral, Texas.

This deal represents one of the largest solar and storage tax equity transactions that uses a combined production tax credit (PTC) and investment tax credit (ITC) structure since the passage of the Inflation Reduction Act (IRA) in August 2022. The Eleven Mile Solar Center will receive a one-time investment tax credit for its battery storage system while the solar farm will generate production tax credits over a ten-year period.

The tax equity partnership with J.P. Morgan includes the option for tax credit transferability. This new tax credit transfer option, created by the IRA, opened a new market for any corporate buyer to support clean energy projects and optimize their federal tax bill through the purchase of tax credits.

“Ørsted is an experienced developer and operator of renewable energy projects in the U.S., including offshore and onshore wind, solar, and battery storage, all of which will generate tax credits valuable to investors,” said James Giamarino, Chief Commercial Officer for the Americas at Ørsted. “With this new market unlocked by the IRA, we’re excited to continue our tax equity partnership with J.P. Morgan and bring on new entities looking to advance the U.S. renewable energy industry, support job growth, and promote local economic development.”

The tax equity investment will help fund the completion of both projects, which totals 550 MW of solar capacity and 300 MW of battery energy storage with the capacity to discharge for 4 hours (1200MWh). Commercial operations for both projects are expected to commence in 2024. The agreement also builds on J.P. Morgan’s existing investments in 1.8 GW of Ørsted’s total 5.7 GW onshore portfolio in the United States....

....MORE

Similar, December 27, 2023:

Jackpot: "First Solar to sell up to $700 million in IRA tax credits to Fiserv" (FSLR)

"How the U.S. Market Went Sideways for a Wind-Power Giant"

A deep dive from the Wall Street Journal, November 20:

Ørsted’s pullback from East Coast wind farms left the region scrambling 

The poster child for the wind-power revolution was supposed to help build America’s clean-energy future. Its messy pullback from the Northeast is threatening those aspirations.

Denmark’s national oil-and-gas company, now known as Ørsted, bet big on renewables a decade ago. It renounced fossil fuels, renamed itself after a 19th-century physicist and embarked on a debt-fueled expansion, becoming the biggest offshore-wind developer outside China. Surfing investor enthusiasm for all things green, Ørsted surpassed

BP

in market value early in the pandemic.

A hotbed of activity was the U.S., where Ørsted made a play at dominating the nascent wind market. The company lined up high-profile projects off the East Coast championed by Democratic-led states with ambitious climate targets.

Much of that work is at risk of running aground.

The company’s cancellation of two New Jersey wind farms on Halloween drew charges of incompetence from the governor and sparked what could be a $300 million legal spat. In New York, a pricing dispute has threatened to delay Albany’s renewable-energy goals. A New England utility partner is trying to unload stakes in three joint projects. Suppliers across the region are in limbo.

Ørsted might need to cancel more projects, sell parts of existing wind farms, or cut its dividend or issue stock to shore up its balance sheet, analysts and investors say. Any turnaround will come under a new-look C-suite after the chief financial officer and chief operating officer stepped down last week.

Ørsted’s stock has plunged more than 75% from its high in 2021, including a roughly 19% drop this quarter.

Similar upheaval is rippling across an industry that the Biden administration placed at the heart of America’s green-energy ambitions. Inflation drove up prices for turbines, labor and steel. Higher interest rates lifted financing costs. Creating an East Coast network of factories, ports, transmission lines and interconnection facilities—all while companies await a glacial permitting process—proved easier said than done. 

Even in Europe, a capital-intensive industry that thrived when interest rates were low and costs fell year after year is in trouble. “I don’t think we are out of the woods,” said Manuel Losa of Pictet Asset Management, who sold Ørsted shares in 2021.

Ørsted was more vulnerable than most to a surge in inflation and interest rates because stiff competition had already driven down power prices and expected returns from offshore-wind projects, former executives say. Some analysts say higher prices planned for the next round of projects in New York and the U.K. could help the industry rebound and aid states in upgrading aging energy infrastructure....

....MUCH MORE

"Wind industry deals with blowback from Ørsted scrapping 2 wind power projects in New Jersey"

From the AP via the Hartford Courant, November 1:

Wind energy developer Orsted is writing off $4 billion, due largely to the cancellation of two large offshore wind projects in New Jersey whose financial challenges mirror those facing the nascent industry.

It added fresh uncertainty to an industry seen by supporters as a way to help end the burning of planet-warming fossil fuels, but derided by opponents as inherently unworkable without massive financial subsidies.

The Danish company said Tuesday night it is scrapping its Ocean Wind I and II projects off the coast of southern New Jersey due to problems with supply chains, higher interest rates, and a failure to obtain the amount of tax credits the company wanted.

“These are obviously some very tough decisions,” Mads Nipper, Orsted’s CEO, said on an earnings conference call Wednesday.

He said the company, the world’s largest offshore wind developer, decided “to de-risk the most painful part of our portfolio, and that is the U.S.”

That statement went straight to the heart about concerns over the financial viability of the offshore wind industry in the northeastern U.S., which is in its infancy but has extensive plans from New England to the Carolinas.

Some projects already have been canceled, and many offshore wind developers are seeking better terms from governments with whom they have already contracted. New York rejected such a request two weeks ago....

....MUCH MORE

Here are the company's two press releases, both October 31: 

Ørsted ceases development of its US offshore wind projects Ocean Wind 1 and 2, takes final investment decision on Revolution Wind, and recognises DKK 28.4 billion impairments 

Interim report for the first nine months of 2023 – Ceased the development of Ocean Wind 1 and Ocean Wind 2, took final investment decision on Revolution Wind, and impairment losses of DKK 28.4 billion

Previously:

"Offshore Wind Developers Likely to Cancel Some Contracts After NY Decision"

Ørsted CEO Says U.S. Offshore Wind Targets Not Out of Reach

"The first US offshore wind auction in the Gulf of Mexico was a dud"

Although we didn't focus on it in August 30's "Ørsted, "World's Largest Offshore Wind Farm-Maker Crashes Most On Record After Catastrophic Results"", during that same conference call Ørsted said it considered abandoning their big offshore New Jersey wind farm but will stick with it, for now.  

They seemed to be doing better back when they were DONG Energy.

"Offshore Wind Developers Likely to Cancel Some Contracts After NY Decision"

From Reuters via gCaptain, October 19:

Developers in the U.S. offshore wind industry will likely cancel some power sales contracts in New York after the state last week denied passing on more of the costs to consumers, but major projects off Massachusetts and Rhode Island are set to start up later this year. 

Several states and U.S. President Joe Biden’s administration consider offshore wind to be a key part of their plans to transition away from fossil fuels for energy, create jobs and reduce carbon dioxide emissions.

Last week, New York utility regulators dealt the industry a severe blow by denying requests to increase the amount of money New Yorkers would have to pay under existing contracts for power to be produced at four offshore wind projects under development.

The wind developers, including units of European energy companies Orsted, Equinor and BP, requested those increases to cover rising labor and equipment costs due to soaring inflation and higher financing costs from interest rate hikes....

....MUCH MORE

Most recently on wind:
Ørsted CEO Says U.S. Offshore Wind Targets Not Out of Reach

"The first US offshore wind auction in the Gulf of Mexico was a dud"
Although we didn't focus on it in August 30's "Ørsted, "World's Largest Offshore Wind Farm-Maker Crashes Most On Record After Catastrophic Results"", during that same conference call Ørsted said it considered abandoning their big offshore New Jersey wind farm but will stick with it, for now.

Ørsted CEO Says U.S. Offshore Wind Targets Not Out of Reach

Someone seems to be missing their ⌀. I put it in the headline but am too lazy to replace it in the text.

From Reuters via gCaptain, September 18:

U.S. President Joe Biden’s plan to deploy 30,000 megawatts (MW) ofoffshore wind by 2030 is still possible, although not easy, the CEO of Orsted ORSTED.CO, the world’s largest offshore wind developer, said on Monday at the Climate Week NYC event in New York.

The remarks by Orsted CEO Mads Nipper come as soaring costs and supply chain delays have increasingly cast doubt on the Biden administration’s goal, a cornerstone of its plan to fight climate change. The Danish company said at the end of August that it may see U.S. impairments of $2.3 billion due to the market challenges.

Orsted Ready to Abandon U.S. Wind Projects Amid Challenges

“We’ve seen dark clouds gather,” Nipper said, noting that interest rates going from largely 0% to 4%, which is having a “very dramatic impact on renewables because the fuel of the renewable industry is capital.”

“We don’t need gas or oil or coal. It’s capital and that overnight has become significantly more expensive,” Nipper said.

Other challenges include “financially fragile” supply chains, “relatively uncertain policy frameworks,” and rising costs for “everything we need” from turbines to foundations and substations, Nipper said.

Policymakers and the industry need to accept that “for a little while the price of renewable power will have to go up, but we will bring it down again,” Nipper said....

....MUCH MORE

Previously:
Ørsted, "World's Largest Offshore Wind Farm-Maker Crashes Most On Record After Catastrophic Results"

"The first US offshore wind auction in the Gulf of Mexico was a dud"
Although we didn't focus on it in August 30's "Ørsted, "World's Largest Offshore Wind Farm-Maker Crashes Most On Record After Catastrophic Results"", during that same conference call Ørsted said it considered abandoning their big offshore New Jersey wind farm but will stick with it, for now.

"The first US offshore wind auction in the Gulf of Mexico was a dud"

From the usually ebullient Electrek, August 29:

There was only one bid in the first-ever US offshore wind auction in the Gulf of Mexico today – here’s why it was a bit of a washout.

The three lease areas off Texas and Louisiana that the Bureau of Ocean Energy Management (BOEM) auctioned today have the potential to generate around 3.7 gigawatts (GW) of clean power for almost 1.3 million households – but only one lease area had a single bid.

Germany’s RWE, one of the world’s largest offshore wind developers, won the rights to the 102,480-acre Lake Charles, Louisiana, offshore wind lease area with a winning bid of $5.6 million. The BOEM says that the Lake Charles lease area has the potential to generate 1.24 GW of offshore wind energy capacity and power nearly 435,400 homes with renewable energy....

....MUCH MORE

Although we didn't focus on it in August 30's "Ørsted, "World's Largest Offshore Wind Farm-Maker Crashes Most On Record After Catastrophic Results"", during that same conference call Ørsted said it considered abandoning their big offshore New Jersey wind farm but will stick with it, for now.

Sales Of Weight Loss Drugs Ozempic and Wegovy Now Account For Most Of Denmark's Economic Growth

Good timing, what with Ørsted having big problems in the wind farm biz. More on timing after the jump.

From the New York Times, August 28:

How Ozempic and Weight Loss Drugs Are Reshaping This Country’s Economy
Novo Nordisk, the Danish company behind two popular obesity medications, is reaping huge profits and is now responsible for most of Denmark’s economic growth.

After 100 years of relatively quiet existence as a maker of diabetes drugs, the Danish firm Novo Nordisk has suddenly grown so big that the company is reshaping the Danish economy. 

The reason: Ozempic and Wegovy, two weight loss drugs made by Novo Nordisk that have been proclaimed as revolutionary in the field of obesity.

The company’s booming success now explains almost all of Denmark’s recent economic growth, and the surge in overseas sales in the drugs is prompting the Danish central bank to keep interest rates lower than it otherwise would, economists say. In the past few weeks, Novo Nordisk’s market value has exceeded the size of the Danish economy. Its soaring share price has made it the second most valuable public company in Europe, after the luxury goods group LVMH.

The company’s shadow is so expansive that Danish economists are now debating whether the country needs to publish another set of economic statistics that strips out Novo Nordisk. In other words, there’s Novo Nordisk, and there’s the rest of the economy.

While Denmark, a country of under six million people, is no stranger to globally significant companies, such as Lego and the shipping giant Maersk, the impact of Novo Nordisk on economic statistics is unique, economists say. 

“We’ve never been in a situation like this in Denmark before where one single company has played such a large role,” said Jens Naervig Pedersen, an economist at Danske Bank.

Last year, two-thirds of Denmark’s economic growth could be attributed to the pharmaceutical industry, said Jonas Dan Petersen, a chief adviser at Denmark’s national statistics agency, which doesn’t provide company-specific data.

And the impact has grown even more stark: “Without the pharmaceutical industry, there was almost no growth” in economic output in the first quarter of this year from a year earlier, Mr. Petersen added. The Danish economy grew 1.9 percent over that period, with 1.7 percentage points of that contributed by pharma.

Denmark is the home of other pharmaceutical companies, but Novo Nordisk has far outpaced them. The company’s revenue last year was about 10 times that of the next largest Danish pharmaceutical company, Lundbeck.

For a long time, Novo Nordisk was almost single-minded in its focus on tackling diabetes. But its new weight-loss drugs are now heavily prescribed, particularly in the United States. The U.S. Food and Drug Administration approved Ozempic as a diabetes medication in 2017; the agency approved Wegovy in 2021.....

....MUCH MORE

Perfect timing.pic.twitter.com/OCytFPH4DU

— Figen (@TheFigen_) July 26, 2023

Ørsted, "World's Largest Offshore Wind Farm-Maker Crashes Most On Record After Catastrophic Results"

Brutal.

From/via ZeroHedge, August 30:

Shares of the world's largest offshore wind farm developer crashed in Copenhagen trading on Wednesday after it warned: "The situation in US offshore wind is severe." 

Orsted A/S was hit with a massive 16 billion Danish kroner ($2.3 billion) impairment on its US portfolio due to snarled supply chains, soaring interest rates, and easy money tax credits drying up -- a warning sign the green energy revolution bubble is in trouble. 

CEO Mads Nipper warned investors on a conference call: "The situation in US offshore wind is severe."

Shares in Denmark-listed green energy giant crashed 25%, the largest daily decline since it went public in early 2016. 

Bloomberg explained more about the headwinds plaguing Orsted: 

The company's Ocean Wind 1, Sunrise Wind, and Revolution Wind projects in the US are being hurt by supplier delays, which could lead to writedowns of up to 5 billion kroner, it said late Tuesday. High interest rates could also add another 5 billion. In addition, the developer is still in talks with federal stakeholders to qualify for additional tax credits, which haven't progressed as expected. If unsuccessful, it could lead to impairments of as much as 6 billion kroner.

Analysts at Bernstein warned clients in a note: "Today's announcement flags risks in the US portfolio and does not do anything to improve the downbeat investor sentiment on the stock." 

"While the bulls could argue many of these issues related to the impairment are already known, the announcement is unlikely to bode well for an already-weakened Orsted share price," Citigroup Inc. analyst Jenny Ping told clients. 

Analysts across the board were overwhelmingly pessimistic about the news (list courtesy of Bloomberg):

BNP Paribas Exane (cut to neutral from outperform)

• The potential write-down of DKK16b dwarfs the DKK2.5b impairment announced in January, analyst Harry Wyburd writes in a note
• Investor confidence will probably be "compromised" for some time

UBS (buy)

• Sam Arie puts the focus on which targets will remain valid in this context
• Says today's announcement is a negative and somewhat of a surprise 
• Adds investors may be concerned in the change in tone since the June CMD where management seemed more confident in regulatory changes that would help to protect the return profile of these US projects....

....MUCH MORE

Somewhat of a surprise? Dude, you had one job. Or used to.

June 26:

....We haven't had much to say about the wind business, either manufacturers or wind farm operators since their returns dropped below those offered by regulated utilities. If the U.S. offshore wind farms ever get started and then, if they can make any money we'll be back to them  

August 3:
"There Is A Financial Crisis Brewing In Offshore Wind Energy"

Why Your ESG Fund Is, And Will Be, Dominated By Technology Stocks (and what it means for your returns)

 What it means for your returns is that you end up with a Nasdaq 100 tracker.

And not just the 100 but in truth the top ten weights which amount to almost 50% of the index:

Components of the Nasdaq 100

#	Company	Symbol	Weight	Price	Chg	% Chg
1	Apple Inc	AAPL	11.675	135.43	0.06	(0.04%)
2	Microsoft Corp	MSFT	9.396	245.30	0.31	(0.13%)
3	Amazon.com Inc	AMZN	8.342	3,276.00	-1.71	(-0.05%)
4	Tesla Inc	TSLA	4.856	817.56	1.44	(0.18%)
5	Alphabet Inc	GOOG	3.521	2,108.00	3.89	(0.18%)
6	Facebook Inc	FB	3.299	270.30	-0.20	(-0.07%)
7	Alphabet Inc	GOOGL	3.195	2,098.90	3.87	(0.18%)
8	NVIDIA Corp	NVDA	2.859	598.40	-0.05	(-0.01%)
9	PayPal Holdings Inc	PYPL	2.699	301.60	3.23	(1.08%)
10	Intel Corp	INTC	1.955	62.00	0.19	(0.31%)

 —Slickcharts

Why is this the case? Because there are, what's the number being bandied about, $30 trillion? Thirty trillion in assets that are being peddled as Environmental, Social and Governance sensitive names.

So there is a huge battle going on among the behemoth marketeers to be the one to define what is meant by the terminology so as to advantage their own businesses. 

And these product packagers, BlackRock with $7 trillion, State Street with $3 trillion, Vanguard and Fidelity with $9 trillion between them, have the clout to call whatever they want whatever they want, and make it stick.

Here's the latest indicator of what's what via today's S&P Global Platts' "Commodity Tracker: 4 charts to watch this week:

....3. US corporate renewable power buyers procure 10.6 GW of capacity in 2020

What's happening? Tech giant Amazon procured 3.163 GW of renewable energy capacity in 2020, leading all large buyers, who collectively procured 10.6 GW of contracted capacity despite coronavirus pandemic-related challenges. This highlights corporate commitment to addressing climate change, the Renewable Energy Buyers Alliance said Feb. 10. S&P Global Ratings has said that, over the past year, more and more businesses have shifted focus to address issues closely linked to mitigation of and adaption to climate change.

What's next? There is significant potential to grow the corporate renewable energy procurement market by improving access to renewable electricity through key federal policy priorities, REBA said. Specifically, addressing capacity market construct issues will be central to improving existing markets and making them work for corporate customers, while expanding US wholesale power markets is an area where the Federal Energy Regulatory Commission can be helpful. Beyond the corporate sector, a drive by dozens of US electricity utility holding companies to provide ESG reports has brought to the forefront numerous new commitments to zero carbon emission goals, and an accompanying surge in plans to install thousands of megawatts of wind and solar generation over the next few decades....

....MUCH MORE, three more charts with commentary but this is the one I cherrypicked to make my point.

The next action we'll see is a push from the gigacaps to mandate a certain percentage of  renewables for all their competitors because:

a) the companies above especially the ones with data centers have taken up almost all the hydro capacity meaning almost everyone else will have to go with wind and solar.

b) despite the rapid decrease in the price of solar electricity at the panel level, when you add the cost of storage, batteries or pumped hydro or molten salt or whatever, and the price of inverters to make your leccy compatible with the grid and back-up power for when the sun doesn't shine or the wind doesn't blow and connection costs and I'm sure I'm leaving a half-dozen costs out, but when you add it all up renewable electricity is still more expensive than natural gas fired turbines, despite the conversion losses when using natty.

Which means the bigger companies will have yet another advantage.

Recently:  

"Ørsted and Amazon sign Europe’s largest offshore wind energy corporate PPA" and "Amazon becomes largest corporate purchaser of renewable energy"

 This is the type of stuff I was writing about in the introduction to December 9's Knowledge@Wharton:: "Why ESG Investors Are Happy to Settle for Lower Returns":

Warning: Because there is a paucity of alt-energy stocks that don't rely on cobalt mined by children in the DRC (for example), certainly not $30 trillion worth, the vast majority of equities touted as ESG by the marketeers are tech stocks.

In part this is because the Google's of the world can claim energy efficiency by talking revenue per kilowatt of electricity used or carbon neutrality because their data centers use hydro-produced electricity or because they don't have smokestacks that some ambush photojournalist can snap pictures of or, whatever.

What this means in practical terms is that when you buy ESG you are buying growth and hypergrowth stocks. Meaning that if there actually is a rotation to value/small cap/other factors etc,. ESG is going to lag, possibly dramatically and ESG investors had better be resigned to underperformance for a long time, and possibly until behaviors are mandated by force of law..

This isn't where the below piece is going but is something that should be top-of-mind any time the subject comes up....

***

All of which means AMZN will be touted as  an exemplar of ESG and poured into portfolios while the stock is rangebound since July after the Covid-19 double from the lows:

BigCharts 

Øerstad on the other hand seems to drop out of one of the feedreaders every other day 

As for the "Ø" see "Oh Oh Norway, You Are Busted".

Index (and ETF and fund) construction: very important

Big Money: "Ørsted brings in new investors for Greater Changhua wind farm"

I mentioned last week that we seem to have a story on Ørsted drop out of a terminal or feedreader every other day. And not tiny deals.

From Splash 24/7:

Denmark-headquartered green energy giant Ørsted has signed agreements with a consortium comprising institutional investor Caisse de dépôt et placement du Québec (CDPQ) and Taiwanese private equity fund Cathay PE to sell a 50% ownership share of its Greater Changhua 1 Offshore Wind Farm.

Ørsted is currently constructing the Greater Changhua 1 site and the project is expected to be completed in 2022.

“I’m delighted to welcome our long-term partner CDPQ and Cathay PE in Greater Changhua 1. It’s encouraging to once again see institutional investors playing an important role in the transition to renewable energy and low-emission economies....

....MORE

The Caisse runs about 260 billion USD but they prefer to quote in Loonies, $333 billion CAD.

Here's more at Le Journal de Montréal:

Énergie renouvelable: la Caisse de dépôt et placement du Québec mise gros sur l’éolien à Taïwan