Norwegian energy company Equinor said on Wednesday that its giant offshore wind project in New York — once halted by the US administration — had lost nearly $1bn in value following regulatory changes and tariffs.
Equinor chief executive Anders Opedal said the company’s net operating income had been hit by a $955 million impairment related to its Empire Wind project “due to regulatory changes” affecting synergies in future offshore wind farms, as well as “increased exposure to tariffs”.
Construction of the first phase of Empire Wind, a complex of 54 turbines capable of powering 500,000 homes in Brooklyn, was temporarily halted by the US administration in mid-April.
US President Donald Trump has repeatedly expressed opposition to wind energy — claiming turbines are unsightly and dangerous — and signed a series of executive orders targeting the sector shortly after returning to the White House in January.
Those included a temporary freeze on federal permitting and loans for offshore and onshore wind projects.
But the administration reversed its decision to block the project in May.
“We continue to progress our portfolio in renewables, and the Empire Wind 1 project development is back in execution,” Opedal said on Wednesday.
Of the total $955 million impairment, Opedal said $763 million related to the Empire Wind 1 project and the South Brooklyn Marine Terminal, while the rest is tied to the second phase of the project.
“The construction of the terminal and port facilities was based on the assumption that several wind farms would use them. This is not very relevant under current conditions,” Opedal said during a press conference.
“The impairment also includes the impact of higher steel tariffs,” set at 50 percent by the administration of US President Donald Trump, he added, while stressing that Empire Wind 1 remained “a profitable project”.
Advertisement
The depreciation weighed on second-quarter results, with Equinor reporting a 30 percent year-on-year drop in net profit to $1.3 billion.
Performance was also affected by the decline in oil prices, which did not suffice to offset the rise in natural gas prices and increased production, which is nearing 2.1 million barrels of oil equivalent per day.
In early morning trading, Equinor shares fell 0.5 percent on the Oslo Stock Exchange, while the broader market was up 0.35 percent.