Bank of America said in a Monday research note that it has upgraded its outlook on offshore wind developer Ørsted, citing recent developments including the potential for the conflict in the Middle East to “create impetus for fossil fuel independence in Europe.”
“We believe that the risks facing Orsted's U.S. projects have significantly diminished in the last few weeks,” said Peter Bisztyga, head of European utilities and renewables equity research at Bank of America and author of the note. “Orsted's repaired balance sheet means it can participate in upcoming offshore auctions to drive growth post 2030, and we believe it could resume US onshore development to fill the growth 'air pocket' between 2028-30E.”
Bisztyga also said that in Bank of America’s view, “the war in the Middle East will create impetus for fossil fuel independence in Europe, with offshore wind a key potential beneficiary.”
The Trump administration in December issued stop work orders on all five U.S. large-scale offshore wind farms under construction. All won injunctions and were allowed to resume work, with Ørsted’s 924 megawatt Sunrise Wind the last to do so in February. The 700 megawatt Revolution Wind project which Ørsted is developing with Global Infrastructure Partners’ Skyborn Renewables received an injunction in January.
Bisztyga said the Department of Justice allowing their window to challenge the Revolution Wind injunction to lapse is a positive for Ørsted, and noted that the window for appealing the Sunrise Wind injunction ends on April 3. “We think risk of adverse policy action against Orsted's two U.S. offshore projects has eased,” he said.
“Revolution [Wind] recently reached first power and met its PPA requirement; news that the Administration may pay developers to exit leases suggests it recognises these cannot be withdrawn arbitrarily,” Bisztyga said, referring to the administration’s payment of close to $1 billion to TotalEnergies in exchange for the company relinquishing two wind leases off the coasts of North Carolina and New York.
After each of the five projects successfully sought injunctive relief from the stop work order, the Department of Justice let its deadline pass to challenge the injunction issued to Revolution Wind – which began delivering power to the grid on March 13.
Ørsted and Global Infrastructure Partners’ Skyborn Renewables are also operating the 130 megawatt South Fork Wind, which began delivering power to Long Island in early 2024.
