Equinor's $941M Lifeline: Ørsted Rescue Amid Trump's Offshore Wind Attacks | Energy Crisis
Key Takeaways
Norway's Equinor is injecting $941 million into Danish offshore wind giant Ørsted to maintain its 10% stake, despite massive financial losses from U.S. political headwinds .
Trump administration's targeted attacks on offshore wind have caused severe project delays and cancellations, including stop-work orders on nearly completed projects .
The offshore wind industry faces massive consolidation as companies struggle with inflation, supply chain issues, and political uncertainty, leading to abandoned projects worldwide .
Equinor's investment represents both a vote of confidence and a strategic necessity, as the company aims to secure board representation and deeper collaboration with Ørsted .
The future of U.S. offshore wind remains uncertain as companies weigh legal challenges, project restructuring, and potential policy changes against continuing political opposition .
Equinor's Billion-Dollar Bet
Let's talk straight facts about this massive financial move. Norwegian energy giant Equinor just pledged nearly $1 billion to bail out Ørsted, Denmark's offshore wind specialist. Specifically, we're talking about DKK 6 billion (about $941 million) to maintain Equinor's 10% ownership stake in Ørsted through their rights issue .
This isn't some random charity move, it's a strategic calculation. Equinor originally invested $2.5 billion for that 10% stake, and that investment has lost about half it's value since Trump resumed office and started targeting wind energy . That's a brutal hit by any measure, yet Equinor is doubling down instead of cutting losses.
Why? Because they see this as a long-term play. Equinor stated this move "reflects confidence in Ørsted's underlying business, and the competitiveness of offshore wind in the future energy mix, in selected geographies" . Translation: They believe the current crisis is political rather than fundamental to the business model, and they're betting on eventual resolution.
The timing is crucial too. Ørsted's shares hit record lows after announcing the capital raise in August, down a staggering 85% since their 2021 peak . Equinor's commitment now signals to other investors that someone still believes in the company's viability when it's trading at bargain basement prices.
Trump's War on Wind Explained
I've been following energy policy for 15 years, and I've never seen such direct targeting of a specific energy sector. On his first day back in office in January, Trump signed an executive order directing the Interior Department to pause new permits and review existing ones for offshore wind . This wasn't some vague directive, it was laser-focused on undermining the industry.
The administration then followed through with concrete actions. In April, Interior Secretary Doug Burgum issued a stop-work order for Equinor's Empire Wind 1 project off New York, claiming regulators under Biden had "rushed" the approval process . Then in August, just weeks before Equinor's announcement, the Bureau of Ocean Energy Management issued another work-stop order against Ørsted's Revolution Wind project off Rhode Island, despite it being 80% complete .
The rhetoric has been equally aggressive. Transportation Secretary Sean Duffy called wind projects "wasteful" and claimed they're "using resources that could otherwise go towards revitalizing America's maritime industry" . In August, his department canceled $679 million in federal funding for a dozen infrastructure projects that would support offshore wind power nationwide .
What's particularly frustrating from an industry perspective is the inconsistency. The Empire Wind lease was actually obtained during Trump's first administration in 2017, and the project spent eight years going through permitting processes . The sudden concern about "rushed approvals" after years of development feels disingenuous at best.
Ørsted's Desperate Situation
Let's be real honest here, Ørsted was in serious trouble before Equinor stepped in. The company announced a $9.4 billion rights issue (60 billion Danish crowns) in August because they hit a wall . They'd been unable to secure an investment partner for their Sunrise Wind project in the U.S. and couldn't complete the planned partial divestment and associated non-recourse project financing .
The Revolution Wind setback was particularly devastating. Imagine sinking $1.5 billion into a project that's 80% complete, only to have the federal government halt construction indefinitely . That's not just a paper loss, that's vessels sitting idle, workers laid off, and equipment deteriorating without being installed.
Ørsted isn't some fringe player either, they're the world's largest offshore wind developer . If they're struggling this badly, it tells you something about the market conditions. Their shares tanked to record lows after the capital raise announcement, and they've lost nearly 90% of their value since the 2021 peak .
The Danish government, which owns just over 50% of Ørsted, had already committed to participating in the rights issue . Norway's sovereign wealth fund, holding about 3% of shares, also said it would vote in favor of the capital raise . But without Equinor, their second-largest shareholder, on board, convincing other investors would have been an uphill battle.
Why Equinor Is Doubling Down
So why is Equinor throwing good money after bad? First, simple math: If they didn't participate, their 10% stake would be diluted significantly . RBC analysts perfectly captured the dilemma, describing Equinor as being "between a rock and a hard place" . Sometimes you maintain your position not because you love it, but because the alternative is worse.
But there's more to it than just protecting an existing investment. Equinor sees strategic opportunity in Ørsted's distress. They announced plans to nominate a candidate to Ørsted's board ahead of the next annual general meeting . This represents a significant shift in approach, they previously said they wouldn't seek board seats . Now they're positioning themselves for greater influence over Ørsted's direction.
There's also speculation about deeper collaboration or even eventual merger. Jacob Pedersen, head of equity research at Sydbank A/S, wrote that "the closer strategic cooperation with Equinor opens up for speculation as to whether Equinor... may be interested in increasing its ownership share and influence considerably" . RBC analysts suggested Equinor's move could be seen as a "first step" toward a potential merger between the two offshore wind portfolios .
From a broader perspective, Equinor remains committed to its green transition goals despite setbacks. The company has a target of 10-12 gigawatts of green power capacity by 2030 . Buying into Ørsted was originally viewed as less expensive than building out its own projects from scratch , and that strategic calculation might still hold despite the current political headwinds.
The Industry-Wide Carnage
Here's what few are talking about: This isn't just a U.S. problem, and it's not just about politics. The offshore wind industry has been struggling globally with inflationary pressures, supply chain disruptions, and rising interest rates . These factors have collectively increased project costs and diminished anticipated returns for developers worldwide.
Equinor itself has been retreating from projects outside the U.S. too. In Australia, they recently withdrew from three different projects . They declined a feasibility license for the Novocastrian Offshore Wind Farm despite being selected by the government in February to proceed with research . They also quietly withdrew from the Bass Offshore Wind Energy project near Tasmania last month .
Other companies are facing similar challenges. Blue Float Energy reported it was not proceeding with a 2 GW project in Victoria, Australia, after its lead investor determined the project was "no longer commercially viable" . Even Ørsted isn't just struggling in the U.S., they announced they would not proceed with the Hornsea 4 project in the UK in its current proposed form .
The common thread here isn't political opposition, it's economics. Development costs have skyrocketed while power prices haven't kept pace, making previously viable projects suddenly unworkable. The political attacks in the U.S. have exacerbated this situation, but they didn't create the underlying financial challenges.
Table: Major Offshore Wind Project Setbacks in 2025
What Happens Next
Short term, Ørsted will hold an extraordinary general meeting on September 5th to seek authorization for the share sale . With both the Danish state (50.1% owner) and Equinor (10% owner) committed, approval seems likely. The company hopes to complete the process by the first half of October .
Equinor will be watching U.S. developments closely. They stated they're "following recent developments around the offshore wind industry in the US closely and will remain in dialogue with Ørsted as the situation evolves" . This suggests they're prepared to adjust their strategy based on political developments.
There's also potential for legal challenges. Molly Morris, president of Equinor Renewables Americas, didn't rule out a future lawsuit over the Empire Wind suspension but noted the company needed an "immediate resolution to save the project" . The administration's refusal to release the NOAA report allegedly justifying the suspension weakens their legal position.
Long term, expect industry consolidation and "new business models" as Equinor predicted . Smaller players without state backing will struggle to survive current market conditions. We might see more partnerships like the potential collaboration between Equinor and Ørsted, or even outright acquisitions by larger energy companies with balance sheets strong enough to weather the storm.
The political situation might eventually change too. Trump won't be president forever, and offshore wind remains popular in many coastal states. New York Governor Kathy Hochul has already signaled she would not stand in the way of energy projects like Empire Wind , creating potential state-level support even during federal opposition.
My Personal Take on This Mess
After watching this industry for years, I've got to be honest, this is one of the most chaotic situations I've seen. Equinor's investment is either brilliant or reckless, and we won't know which for years. They're betting heavily that political winds will shift faster than market conditions deteriorate.
What most analysts aren't discussing enough is the strategic value of board representation. By getting a seat at Ørsted's table, Equinor gains influence over not just their investment but the entire industry direction. That's valuable intelligence and leverage that goes beyond the financial aspect.
The Australian retreat bothers me more than the U.S. issues. Political problems might reverse quickly with an administration change, but economic challenges like those causing Equinor to abandon Australian projects are more fundamental. If projects aren't viable even without political interference, that signals deeper industry problems.
I'm also skeptical about the merger speculation. Equinor and Ørsted have different cultures and strategies, a forced marriage due to market conditions rarely works well. Collaboration might bring benefits, but full integration could create a bloated organization struggling to execute in a challenging market.
Finally, remember that Equinor is 67% owned by the Norwegian state , while Ørsted is 50.1% owned by the Danish state . This isn't purely a business decision, there are geopolitical elements at play. Nordic countries collaborating on energy security and green transition makes strategic sense beyond immediate financial returns.
Frequently Asked Questions
Why is Equinor investing $941 million in Ørsted right now?
They're basically protecting their existing investment. If they didn't participate in the rights issue, their 10% stake would be diluted. It's also a strategic bet that offshore wind will recover long-term, and they want board representation to influence Ørsted's direction .
What specifically has the Trump administration done against offshore wind?
On his first day back, Trump signed an executive order pausing new permits and reviewing existing ones. Then his administration issued stop-work orders on specific projects including Ørsted's Revolution Wind (80% complete) and Equinor's Empire Wind 1. They also canceled $679 million in federal funding for wind infrastructure projects .
Is this just about U.S. politics or are there other problems?
While politics get the headlines, the industry faces broader challenges. Inflation, supply chain issues, and rising interest rates have increased costs globally. Equinor itself abandoned projects in Australia for economic reasons, and Ørsted cancelled UK developments .
Could Equinor eventually take over Ørsted completely?
Analysts like Jacob Pedersen of Sydbank speculate this could be a first step toward increased influence or even eventual takeover. However, with the Danish state owning 50.1%, any takeover would require their approval, which isn't guaranteed .
What's the timeline for Ørsted's capital raise?
They have an extraordinary general meeting on September 5th to approve the plan. If approved, the prospectus and price details come out shortly after, with the goal of completing the process by first half of October .