Denmark’s Orsted is facing significant cost challenges for its U.S. projects due to new tariffs imposed by President Donald Trump.
Offshore wind projects of Orsted
Connecticut
Revolution Wind
Maryland
Skipjack Wind
New Jersey
Ocean Wind 1
Ocean Wind 2
New York
South Fork Wind
Sunrise Wind
Rhode Island
Block Island Wind Farm
Revolution Wind
Orsted CEO Rasmus Errboe told Financial Times that the tariffs on aluminum and steel would have a “meaningful impact” on the company’s major wind projects in the U.S., specifically naming Revolution Wind and Sunrise Wind. These two projects represent a substantial part of Orsted’s investments in the American offshore wind sector and are now expected to incur higher expenses because of the increased cost of raw materials.
Alongside this, Orsted has issued a call for European governments to offer consistent annual support for the offshore wind industry, highlighting the need for stability to meet clean energy targets and offset rising development costs. Despite a request for clarification, the company did not immediately provide a comment to Reuters.
Trump’s move marks a dramatic shift in policy, as he announced a temporary easing of the very tariffs he had aggressively implemented against multiple countries, even while intensifying economic pressure on China. These policy swings have contributed to uncertainty in the energy sector.
Offshore wind farm construction in the U.S. has already slowed significantly, particularly since Trump, upon returning to office in January, suspended new offshore wind leasing as one of his first executive actions. This decision created further hurdles for companies like Orsted and others in the renewables space.
Orsted financials
Orsted reported an operating profit (EBITDA) of DKK 32.0 billion for 2024, up from DKK 18.7 billion in 2023, including DKK 7.3 billion from a net reversal of provisions for cancelled projects. Excluding new partnerships and cancellation fees, EBITDA was DKK 24.8 billion, aligning with the company’s guidance.
Offshore site earnings rose to DKK 23.8 billion, driven by increased generation from wind farms such as Greater Changhua 1 and 2a, South Fork, and Gode Wind 3, along with higher wind speeds and inflation-linked pricing.
The company recorded impairments totaling DKK 15.6 billion, mostly linked to US projects due to rising interest rates, lower seabed valuations, delays, and higher costs, including a DKK 1.5 billion write-off from stopping construction of FlagshipONE. Annual profit stood at DKK 0.0 billion, but adjusted for impairments and cancellation fees, it was DKK 6.4 billion. Return on capital employed was 4.5 percent, or 10.1 percent when adjusted.
US clean energy market
Meanwhile, despite political and regulatory challenges, the U.S. has seen notable progress in its clean energy transition. According to analysts at Ember, wind and solar power have seen explosive growth since 2015, more than tripling in output by 2024 with a combined generation of 757 terawatt-hours (TWh).
This growth has enabled wind and solar to surpass coal in the U.S. electricity mix for the first time, supplying 17 percent of the nation’s power in 2024. This milestone signals a major shift in the country’s energy landscape, even as overall demand has begun rising again after a mostly stagnant 2010s. From 2020 onward, demand has increased in three of four years, averaging a 1.8 percent annual rise.
However, the clean energy gains have been driven almost entirely by wind and solar, as other sources of low-carbon electricity — like bioenergy, nuclear, and hydro — have all seen declines in output compared to 2015.
As a result, clean electricity made up 42 percent of U.S. power generation in 2024, matching the global average. Within that, wind and solar alone contributed 17 percent, slightly ahead of the global benchmark of 15 percent but falling short of China’s 18 percent.
Fossil fuels still dominated the U.S. grid, providing 58 percent of the electricity in 2024. Notably, natural gas played a massive role, delivering 43 percent of total generation — more than double the combined gas output of all other G7 countries. This heavy reliance on gas explains why, despite the decline of coal, the U.S. remains aligned with the global average in terms of fossil fuel dependency.
In 2024, the U.S. ranked 11th globally in electricity demand per capita at 12.7 megawatt-hours (MWh), marking the highest level since 2014. Per capita demand in the U.S. is double that of the European Union, reflecting both lifestyle and industrial usage patterns.
This high level of consumption also translates into elevated emissions. In 2024, the U.S. power sector emitted 4.9 metric tons of CO₂ per capita — more than twice the global average of 1.8 metric tons —underscoring the environmental cost of the country’s energy habits even amid ongoing efforts to shift toward renewables.
Baburajan Kizhakedath