Ørsted’s Winds of Change: A Tough Road Ahead

Green energy narratives are seemingly emerging faster than wind turbine blades can spin in a Nantucket storm.

On August 11, 2025, Ørsted, Denmark’s major player in offshore wind, made a startling announcement regarding its U.S. operations. The company decided to pursue up to 60 billion Danish kroner, roughly $9.4 billion, in large-scale rights issues. This move, which represents nearly 50% of Ørsted’s market value, appears to be a response to the challenges posed by President Donald Trump’s energy policies.

Following this revelation, Ørsted’s stock saw a significant decline, dropping 31.2% in Copenhagen, leading to a loss of billions almost overnight.

The company is currently financing the Sunrise Wind Project, a 924-megawatt initiative off New York’s coast while planning to boost capacity to an additional 8.1 gigawatts by 2027. However, the reality is that Ørsted faces a “material adverse development” in the U.S. market.

To put it plainly, Ørsted is now looking to offload large minority stakes to gather the necessary capital, as the traditional business model has been disrupted by the current political climate. As Trump’s energy policies take effect, finding buyers for these stakes has become a real struggle.

Trump’s approach to the wind industry, especially offshore, has been anything but supportive. During the 2024 campaign, he consistently criticized the offshore sector, citing exaggerated environmental concerns and visual pollution. His administration’s actions began with executive orders that froze new leases and aimed to curb wind projects, paving the way for a bill that would phase out Biden’s subsidies for wind energy.

This has made it increasingly difficult for Ørsted to sell its Sunrise Wind stakes. Sane investors seem wary of venturing into a politically charged landscape, especially without a robust business model to lean on amidst disappearing government subsidies. For many deals Ørsted has tried, the new energy policy climate seems to have left them in a precarious position.

It’s worth noting that Ørsted has struggled to establish a foothold in offshore winds for quite some time. In 2023, amidst the spending spree under the Biden administration, the company reported a staggering loss of $5.6 billion, leading to project cancellations and a change in leadership. Factors like inflation and supply chain issues, coupled with volatile subsidies, transformed what many saw as a green energy boom into a financial dilemma. And with Trump’s administration in play, the harsh realities are now clearer than ever.

CEO Rasmus Errboe, who stepped into the role early in 2025, described the current situation as “extraordinary.” Yet, it’s tough to overlook that under his predecessor, Mads Nipper, Ørsted grew accustomed to relying heavily on government subsidies. In fact, seeking more financial support seems to be embedded in Ørsted’s operational framework.

The subsidies provided by both the Biden administration and New York Governor Kathy Hochul only scratch the surface of what Ørsted relies on. With the Danish government holding a 50.1% stake in the company, taxpayers there will bear a significant portion of the financial fallout if the Sunrise Wind venture falters.

Isn’t it something to consider?

Returning to the U.S. landscape, the pause on Trump’s wind lease initiatives brings a sigh of relief for fishermen, wildlife, and locals who are tired of seeing their coastlines industrialized for energy sources that often yield meager returns.

Ørsted’s recent challenges highlight broader systemic issues with renewable energy initiatives. Offshore wind has been touted as a vital solution to our planetary issues by influential politicians, yet it’s fraught with challenges: escalating costs, environmental concerns (just look at Nantucket’s complaints), and an over-reliance on subsidies that vanish when leadership changes.

Now, it seems the truth about the offshore wind industry is becoming undeniable. The initial dream appears to be crumbling, and perhaps it’s time to reconsider its viability.