Demand for clean energy shows the need for new energy solutions

Jacob Grønholt-Pedersen and Stein Jacobsen
| Reuters

COPENHAGEN, Nov 5 (Reuters) – Demand for green energy in the United States will grow regardless of who becomes the country’s next president, major wind energy players Vestas VWS.CO and Orsted ORSTED.CO said on Tuesday.

Offshore wind developers’ profits have been squeezed in recent years by rising raw material costs, high interest rates, inadequate grid connectivity, supply chain bottlenecks and competition from China, prompting companies such as BP BP.L and Equinor EQNR.OL , reduce your ambitions.

In the United States, the nascent offshore wind industry has been rocked by canceled projects, delayed leases and a construction disaster at the nation’s first large offshore wind project.

On Tuesday, Orsted reported construction problems and rising costs at a major U.S. offshore wind project.

Democratic Vice President Kamala Harris has championed ambitious offshore wind energy goals in President Joe Biden’s administration.

She is in tight competition with Republican candidate Donald Trump, who has said he would kill offshore wind projects by executive order on his first day in office if he recaptures the White House, arguing that wind turbines destroy the environment and kill birds and whales.

“We see that many – both corporations and governments – are experiencing increased demand from the reorientation of industries and the technology industry,” Orsted CEO Mads Nipper told reporters on Tuesday.

“We see this as an all-boats-raising situation, where all sources of energy, not least electricity, are needed no matter who ends up in the White House.”

New green electricity needed

Shares in Vestas VWS.CO, the world’s largest wind turbine maker, fell more than 10% on Tuesday after the company warned of lower profits this year.

Vestas CEO Henrik Andersen played down investor concerns about Tuesday’s election results.

“I don’t think any order intake is affected by today’s election,” he said on a call with analysts.

“There is a general need and demand that exceeds supply right now for new green electrons for data centers, among other things,” he added.

Orsted, the world’s largest offshore wind developer, posted huge losses on canceled U.S. offshore projects last year due to rising inflation, rising interest rates and supply chain delays.

“This industry is being built from the ground up and there is a lot of support for it, not least in the northeastern states where energy alternatives, especially clean energy, are difficult,” Nipper said.

Orsted said a shortage of installation vessels and problems with offshore substation installation at the 704-megawatt (MW) Revolution Wind project contributed to costs increasing by a further DKK 1.7 billion ($248 million) in the third quarter.

Group operating profit for the quarter fell 14% to 4.44 billion crowns. Analysts on average had forecast 4.61 billion, according to a survey conducted by the company.

The profit was helped by offsetting some of the losses Orsted suffered last year in the US.

Its shares fell 1.5% at 1239 GMT. They’re up about 12% this year but down more than a third from their early 2021 peak.

($1 = 6.8472 Danish krone)

Reporting by Jakob Grønholt-Pedersen and Steine Jakobsen in Copenhagen; Editing by Louise Rasmussen, Mark Potter and Barbara Lewis.