Wind farm manufacturers like Orsted have seen their share prices tank following the assassination attempt on former president Donald Trump, as markets bet that the more likely it is he’s re-elected, the worse it is for renewable energy.
The London-listed company’s stock price is down 8.5 per cent since the weekend, with no shifts in companies that do not operate in the US, such as Greencoat UK Wind.
Similar falls have been recorded in other wind developers and owners across the world, as markets bet that Trump’s pledge to ban offshore wind projects on his first day in office.
American-based Nextera Energy, listed in New York, saw its stock price drop five per cent when markets opened on Monday, while Danish wind farm manufacturer Vestas has dropped eight per cent to its lowest level in eight months.
“Orsted and other offshore wind developers faced significant delays during his previous term in obtaining approvals from the Bureau of Ocean Energy Management (BOEM),” explained Tancrede Fulop, senior equity analyst at Morningstar.
“These delays, coupled with rising costs and interest rates, led to major impairments and project cancellations in 2023.”
A Trump victory could end up cancelling any upcoming auctions in the US offshore wind market, or discourage bidders, he warned.
However, analysts have argued that fears that Trump could cause serious damage to renewables companies might be overblown, and the market might be getting it wrong.
While there’s “no doubt that Trump will do what he can to make life harder”, Jacob Pedersen, head of equity research at Sydbank, told MarketWire, he “probably can’t ruin much for them in the short term”.
”What has been passed for onshore wind has already been passed in Congress, and several Republican states are also dependent on those jobs,” Pedersen explained.
Orsted, for example, has two projects under construction that total 1.6 gigawatts, and since they received approval last year, they can’t be targeted by any executive orders from Trump.
Meanwhile, while it currently has bids in Massachusetts, Connecticut, and Rhode Island, Fulop said that a withdrawal from the auctions would have a “minimal” financial impact on the company.
“With the book value of Orsted’s remaining US offshore wind projects now limited, further rate increases due to Trump’s proposed tax cuts would result in only minor additional impairments,” he added.