Equinor writes down $955 million in US offshore wind costs, blaming Trump

Equinor, of Norway, booked a $955-million impairment on a project for offshore wind in the United States on Wednesday. The company cited U.S. tariffs as well as the uncertain regulatory environment in the United States under President Donald Trump. On Trump's first official day in office, in January, he cancelled all offshore wind leases. This dashed the hopes that the United States could revive the sector. In April, Interior secretary Doug Burgum closed down Equinor Empire Wind in New York State. Later, he lifted the stop-work orders on the project.

Equinor has suffered a great deal of damage.

It reported Wednesday that its net operating profit for the second quarter was down due to having had to book an impairment of nearly a billion dollars on its U.S. off-shore wind projects.

Equinor released a statement Wednesday that said, "This is affected by an impairment amounting to $955 million as a result of regulatory changes which have caused loss of synergies for future offshore wind project and increased tariff exposure."

"Of these, $763 millions is related to Empire Wind 1 South Brooklyn Marine Terminal project. The remainder is related the Empire Wind 2 Lease."

Equinor, a Norwegian company majority-owned by Norway, won a federal leasing agreement for Empire Wind under Trump's administration in 2017. It also received approval for investment plans for 2023 when former President Joe Biden was in the White House. Global offshore wind, once hailed by governments as the cornerstone to cutting carbon emissions, is now struggling under rising costs and logistical challenges.

Equinor's CFO Torgrim Reitan stated that the U.S. Administration changing their mind about developing offshore wind farms had affected the value the group's onshore terminal built in South Brooklyn to serve offshore farm installations.

He told Bloomberg TV that the change in regulations has made it unlikely that there will be any more offshore wind farms built in the U.S. for the foreseeable future. This is having an impact on a project we are working on that involves staging facilities.

He added that Equinor will not be developing the second phase as planned of the Empire Wind Farm.

Reitan stated that Empire Wind 2 is not being pushed forward at the moment.

Equinor announced on Wednesday that the total book value of the latest impairments is $2.3 billion.

Empire Wind 1 was to start operating in 2027 with a capacity of 810 Megawatts. This would be enough to power a half-million homes per year. Equinor reported on Wednesday that its core second-quarter earnings were down, as was expected, because of lower oil prices. (Reporting and editing by Terje Sollvik, Jacqueline Wong, Barbara Lewis; Additional reporting by Stine Jacque Jacobsen from Copenhagen)

(source: Reuters)