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Wind industry bosses have warned of “negative spillover” effects on investor sentiment after the Trump administration suspended leases on all large US offshore wind projects on national security grounds.
Henrik Andersen, chief executive of Vestas, Europe’s largest wind turbine maker, and president of industry body WindEurope, said uncertainty in offshore wind markets could push up the cost of capital, as investors price in greater risks.
He described 2025 as a “rollercoaster” year for offshore wind developers after being hit by stop-work orders from the Trump administration, which argues the technology is expensive and unreliable on top of the national security concerns.
It follows several difficult years for the industry because of rising costs and supply chain strains. Developers, including Ørsted and Equinor, have booked hefty impairments on US offshore wind projects, while Ørsted has also halted a big UK project, Hornsea 3.
In Japan, Mitsubishi pulled out of several projects citing surging construction costs.
Questioned about the cost trajectory in the industry, Andersen said the cost of capital, which reflects the returns investors expect, had not increased in the past year.
But he added that there was “a little uncertainty on some of the offshore markets — probably related out of what has happened in the US — and I think that could be a negative spillover to the cost-of-capital levels”.
Japan’s decision to suspend offshore wind auctions following Mitsubishi’s decision to pull out, and other troubled offshore wind auctions, had added to the uncertainty, he continued.
“When you have a 20 to 30-year investment programme, the only way you can cover yourself for risk is to ask for a higher return,” he said. “When you get impairments in an industry, everyone would start saying, ‘could that hit us as well?’”
Vestas is the turbine supplier for Equinor’s Empire Wind project, which alongside Ørsted’s Revolution Wind and Sunrise Wind is among five large wind farms under construction that have been suspended by the Trump administration.
Both Ørsted and Equinor are challenging the lease suspensions in court. Hearings are scheduled this week.
Ørsted, the world’s largest offshore wind developer, undertook a $9bn rights issue in September in an effort to shore up its finances because of the challenges in the US.
Despite the offshore industry’s challenges, Tinne Van der Straeten, the former Belgian energy minister who starts as the new chief executive of WindEurope on Monday, said Europe’s geography meant the technology had a “beautiful” future. But she warned “it will not fall from the sky” and that there remained “huge investments to be made”.
Wind turbines supply about a fifth of Europe’s electricity, with onshore developments accounting for the majority of the continent’s current capacity. The industry accounts for 370,000 jobs and contributes roughly €52bn to Europe’s GDP, according to WindEurope.
As Belgian energy minister from 2020 to 2025, Van der Straeten was responsible for pushing forward the Princess Elisabeth Island energy hub, which will connect offshore wind projects in the North Sea, despite costs that have soared from early estimates of €2.2bn in 2021 to more than €7bn today.
As part of efforts to protect Europe’s clean energy industries from being undercut by cheap Chinese competition, the European Commission is discussing “made in Europe” criteria that could be applied to specific technologies that benefit from public tenders, such as wind power.
Both Van der Straeten and Andersen said the industry was not in favour of such clauses.
“We were decades building a global supply chain, and therefore onshoring it all back to the shores of Europe is not going to make any of the solutions more competitive,” Andersen said.
Van der Straeten said the industry wanted “a fair and open competition” in global markets, but with a “level playing field”. To allow the rollout of wind energy to continue, policymakers should focus on upgrading the grids and supporting battery storage to back up intermittent renewable power, she said.
