Europe’s wind industry is confronted with uncertainty about Trump’s policy

In the vast flatlands of the Jutland peninsula in Denmark, near the small town of Give, a family business called Welcon has prepared to build gigantic, cylindrical wind turbine towers for a project with several billions of dollars.

The project, a wind farm called Empire Wind, is built by the Norwegian energy giant Equinor in the waters for Long Island, NY, but those plans were thrown in disorder last month when the Trump administration, which is skeptical about offshore wind energy, ordered An indefinite stop to construction.

The break shocked Carsten Pedersen, who owns Welcon with his brother Jens, and the wind industry.

“In my opinion it is a banana republic there,” Mr Pedersen said, referring to the chaotic Blitz of policy changes from Washington. “You can’t just stop projects” whose developers have been doing work for years.

Welcon was tapped as a subcontractor to deliver the towers for the project by Vestas Wind Systems, a leading wind turbine maker, who has his head office in Aarhus in Jutland.

If Empire Wind is permanently closed, Vestas loses a production order that is probably worth around $ 1 billion for 54 of the newest turbines, which have knives of almost 380 feet long. The contractors would probably receive some compensation from Equinor.

The wind industry is crucial for Europe’s ambitions to tackle climate change and to improve energy security, but three months after President Trump’s second term of office, industry managers assess their approach to renewable energy.

An important question is whether the initial flurry of the president’s actions, as well as worries about what could come, will derail what seemed to be at the start of an industry recovery.

The wind industry broke after the pandemic, then higher interest rates and Inflation played contracts and projects In loss makers. Industrie leaders count on Europe to make up for a withdrawal in the United States.

“We see nothing happening in the US in jeopardizing the perspective for offshore wind in Europe,” said Rasmus Errboe, Chief Executive of Orsted, a Global Wind Developer in Denmark. He added that he expected that offshore Wind would make 20 to 25 percent of European electric power generation by 2050 compared to around 4 percent in 2024, which implies that hundreds of billions of dollars will be spent on new facilities.

In general, the wind provided an industrial group about 20 percent of European electricity in 2024, according to Windeurope.

Vestas and Orsted reported both positive financial results of the first quarter this week. Vestas said that it had earned a small profit of 5 million euros in the quarter, compared to a loss a year earlier, while Orsted, who had previously taken major depreciation on some planned projects in the United States, said the profit had risen by 87 percent to 4.9 billion Danish Krone, or about $ 744 million.

The stock price of Vestas drops by around 50 percent compared to a year ago, and Orsted’s has fallen by around 40 percent at the same time.

In a sign that the economic and regulatory environment remains difficult, even in Europe, Orsted said on Wednesday that it would not continue with a large planned wind facility called Hornsea 4 in the North Sea of ​​Great Britain.

Mr. Errboe blamed the rising prices of suppliers and uncertainty for the decision, which the company costs no less than 4.5 billion krone or around $ 680 million to compensate for contractors and other costs. “We just saw that prices have risen and the risk of the project has risen,” he said.

Despite the risks, offshore wind has been a great success in North Europe. Orsted estimates that the costs of electricity from these installations fell by 70 percent from 2015 to 2020, thanks to ever larger turbines and other innovations. Since then, however, the costs of wind generation have increased by 50 percent.

A few years ago, the United States looked like a promising market for offshore wind. Now industrial managers assume that there will be no new offshore projects under the Trump administration.

There are questions about whether the handful of gigantic projects are underway, including two of Orsted, called Revolution Wind Off Rhode Island and Sunrise Wind Off Montauk, NY, will be completed.

Mr. Errboe said that these projects were already underway. Orsted took $ 180 million in depreciation about the value of these wind farms because of the impact of the 25 percent rate imposed on imported steel and aluminum by the Trump administration.

Because it is mainly a land-based turbine builder, Vestas, which has 30 percent of the world market outside of China, is somewhat isolated from the travails of offshore wind, a newer, riskier industry.

Henrik Andersen, the President and Chief Executive of the company, said in an interview that Vestas had learned through the Pandemic and earlier periods of international concern about China to regulate his turbine production geographically to reduce damage due to rates and other measures. “We generally tend to shake things around,” he said.

Vestas has factories in Colorado, where the land -based turbines it sells in the United States, one of the largest markets.

Mr Andersen said that these facilities had run “seven days a week” to produce turbines that were ordered under the favorable circumstances that prevailed during the Biden administration.

Having American factories, he said, reduced the effect of rates, although some components such as generators are probably still imported.

Whether factories will continue to work with full tilt depends on whether confidence returns. Orders for onto on the United States have dried up, at least temporarily, while developers wait until the White House clarifies the policy.

Endri Lico, a chief analyst at the Wood Mackenzie consultancy, estimates that turbine orders in the United States have fallen to their lowest level since the first quarter of 2020. “Uncertainty dominates,” he said.

Dealing with changes and strangers has become the role of a wind director. “Of course I don’t know what will be announced in five or six days,” said Mr Andersen.

What is certain, however, he said, that the costs will be passed on to customers and “rates will mean higher electricity prices in the US”