- European clean energy investments are on the back foot with Trump’s win.
- Ørsted, Vestas, and Nordex stocks decline with policy uncertainty.
- Policy rollbacks proposed by Trump might disrupt offshore wind and climate policies.
- Analysts see US renewables as a growth area for the European firms.
Donald Trump’s victory in the US presidential elections threw Europe’s clean energy markets into disarray and instilled fears among investors about a future policy on US climate, as well as supports being offered to renewable energies.
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The stocks of several clean energy companies plummeted immediately following Trump’s win, according to reports from Reuters. They cited possible rollbacks of a sector, including a renewable wind offshore project, specifically incentives by the Joe Biden-led government.
One of the political promises Trump made included dismantling offshore wind initiatives and scaling back climate policies. This also includes exiting the Paris Agreement and overturning the Inflation Reduction Act.
These promised actions have caused investor concerns, and the implications have not been ignored. Indeed, European clean energy stocks like offshore wind developer Ørsted plunged 14% following his election win, while Vestas and Nordex, the world’s two largest wind turbine manufacturers, fell by 11% and 7.6%, Reuters reported.
Analysts warn that this policy change is bound to impact European firms seriously with strong interests in the U.S. market for renewables, one of several significant growth areas for these major players. According to Deutsche Bank analysts, a stable U.S. policy has been crucial for companies like Denmark’s Ørsted, Germany’s RWE, and Portugal’s EDP Renováveis, which are counting on such a policy to underpin their renewables investments.
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Though complete repeal of the IRA would require Congressional approval, analysts seem to hint that Trump still might be able to bring along some significant changes, casting a shadow over the sector.
Indeed, despite this market reaction, most companies appear cautiously optimistic. Vestas and Ørsted have been quoted as saying that the demand for renewable energy in the United States is likely to continue, even with the change of political fortunes. A Nordex spokesperson told Reuters similar sentiments: “There is still continued confidence in the US onshore wind business, even if a few must wait a little longer for their investments to pay off under new policies.”.
Industry experts at GlobalData, the parent company of Power Technology, feel that these latest exposures might mark the beginning for Trump toward fossil fuels. This will not go well with any of the Europe-based clean energy companies as they re-evaluate their investment strategies in the United States considering the new policy by Trump.
Also read: Latest Renewable Energy News
It may create tremendous uncertainty for investors in European renewables since policy changes could again redefine the landscape in the US marketplace. Although companies continue to harbor hopes that demand for green energy in the US may be sustainable, it is a fact that the next few years pose new difficulties for European utilities as they seek to navigate these policy changes.
