A German energy firm has said that Donald Trump’s election victory has increased the risks of investing in offshore wind projects – but his return to the White House could help bolster Britain’s renewables sector, according to UK developer SSE.
Germany’s RWE has cut its spending plans and warned that, as a result of the US election, “the risks for offshore wind projects have increased”.
The company, which is behind a string of wind and solar projects, on Wednesday shaved €3bn from its spending plans for the next financial year to €7bn, down from €10bn in 2024. It will also delay its plans to invest €55bn in renewables before 2030.
Trump’s re-election last week sent a chill through the renewables sector, as investors dumped green energy stocks.
He has vowed to clamp down on Joe Biden’s Inflation Reduction Act, which stands to inject about $433bn in grants, loans and tax incentives to healthcare, utilities and clean energy companies.
Separately, Alistair Phillips-Davies, the chief executive of Britain’s SSE, said a clean energy slowdown in the US could be “a real positive” for the UK even after Trump’s victory wiped billions from the market value of Europe’s largest renewable energy developers.
But Phillips-Davies told the Guardian that, while doubts surround the future of the US industry, the UK could seize the chance to secure a greater share of global supply chains and manufacturing opportunities.
“It’s not good news for US renewables but it could be helpful because it means the US will not be sucking up the global supply chain,” Phillips-Davies said.
Renewable developers have been forced to compete for supplies of products used for green projects in recent years as demand for new windfarms has taken off, raising concerns over project delays.
Siemens Energy, one of the world’s largest wind turbine makers, on Wednesday reported a net income of €1.3bn for its last financial year as it begins to emerge from a crisis in its wind turbine division which led to a historic loss of €4.6bn.
Phillips-Davies added that the UK could now get “ahead of the game” to secure its supply of materials and components and establish its own manufacturing capabilities. This would help the UK to deliver domestic projects at lower cost and increase exports to the rest of the world, he said.
It could prove to be “a real positive in terms of an industrial strategy story”, he added.
SSE, which is building the world’s biggest offshore windfarm in North Sea, was not directly affected by the sell-off in renewable shares as its focus is on the UK and Europe. It is planning to expand its portfolio into continental Europe.
Phillips-Davies used the company’s half-year financial results to announce his retirement as chief executive next year after 11 years in the role. SSE’s pre-tax profits climbed by 26.4% from last year’s half-year results to £714.5m, he said.
Michael Müller, the chief financial officer of RWE, which has multi-billion euro plans to develop windfarms in the US, said that its investment plans for the rest of the decade would “slip back” following the election result, and due to delays to Europe’s green hydrogen plans. “But we will have to wait and see how things develop in the future,” he added.
RWE reported earnings of €4bn in the first nine months of the year, down from €5.7bn in the same period in 2023 despite its growing renewable energy generation.
Its share price tumbled by more than 4% after the US election result, but its decision to take a more cautious approach to investment combined with a €1.5bn share buyback programme, helped its share price to climb back above pre-election levels on Wednesday.
Tancrede Fulop, senior equity analyst at Morningstar, said: “The buy-back addresses investor demands from the substantial profits during the 2022-23 energy crisis, and management’s decision is supported by potential delays in US offshore wind projects and challenges in Europe’s hydrogen sector.”
