For the Danish wind farm developer Orsted, the bad news has not stopped. Once on its way to becoming a giant of renewable energy, the company is now shrinking in everything from stock market value to ambition.<\/p>\n
The reversal of fortune comes amid a broad downturn in the offshore wind industry<\/a> set off by rising construction costs and interest rates after the pandemic and exacerbated by President Trump\u2019s dislike of wind farms.<\/p>\n Orsted<\/a>, which helped create and dominated the offshore wind industry, has felt a huge impact from these setbacks. The company said last week that it would lay off 2,000 people, or 25 percent of its staff, over the next two years.<\/p>\n Rasmus Errboe, the company\u2019s president and chief executive, offered a blunt explanation for the job cuts: Orsted was narrowing its focus and dialing back its aspirations.<\/p>\n Instead of lining up new, multibillion-dollar wind farms to build in shallow waters around the globe, Orsted will mainly focus on finishing those it has under construction and managing them or selling them off.<\/p>\n The company will complete \u201cour large construction portfolio in the coming years, which is why we\u2019ll need fewer employees,\u201d Mr. Errboe said in a statement.<\/p>\n Orsted operates a large portfolio of offshore wind farms and is building six more. These arrays of enormous turbines produce the bulk of the company\u2019s revenue, close to $7 billion this year, according to analysts\u2019 estimates.<\/p>\n The reshaping of Orsted is rippling across its home country, Denmark, which for half a century has been a nurturing ground<\/a> of the contemporary wind industry.<\/p>\n Rasmus Errboe, who became chief executive of Orsted this year, has taken steps to shore up the struggling company.Credit…Tom Little\/Reuters<\/p>\n A predecessor of Orsted built the world\u2019s first offshore wind farm, Vindeby, in 1991 in Denmark. Since then, Orsted has led the way in building wind farms in waters off Europe and elsewhere, including Taiwan. Europe now has more than 3,600 offshore wind turbines, many of them developed by Orsted.<\/p>\n Not all of the Danish wind industry is struggling. Vestas Wind Systems, the leading maker of wind turbines<\/a>, looks better positioned for the current environment because it is largely focused on land-based equipment rather than offshore machines and has factories in Colorado that should help buffer any impact from Mr. Trump\u2019s tariffs.<\/p>\n Orsted said 235 of the 500 layoffs planned for this quarter would be in Denmark, where some 33,000 people work in the wind industry, according to Green Power Denmark, an industry group.<\/p>\n The wind industry employs roughly 370,000 people in Europe and accounts for around 20 percent of the region\u2019s electricity generation, according to WindEurope, a trade body.<\/p>\n As much as any country, Denmark has embraced a vision of a future in which much of the global economy runs to a great extent on electricity generated from green sources.<\/p>\n For Denmark, a small country with about six million people but driven by entrepreneurial flair and engineering and scientific skills, developing wind and other renewable energy has seemed attractive. Sustainable energy appeals not only to the many people who want to address climate change but also to those who see a promising source of economic growth and employment.<\/p>\n Recent developments, though, including rising costs and the Trump administration\u2019s efforts to stymie renewable energy, have prompted a reassessment of some of the goals that the European Union and national authorities have set for the industry.<\/p>\n Wood Mackenzie, an energy consulting firm, forecast that less than 50 percent of the cumulative targets set by national governments, excluding China, for offshore wind for the end of the decade will be achieved.<\/p>\n \u201cI think, in terms of electrification, there are certainly warning signs,\u201d said Anders Kronborg, senior economist at Copenhagen Economics, a research firm.<\/p>\n The Trump administration has taken several steps to curb offshore wind, including halting construction on two wind farms off the East Coast of the United States. It later allowed one, Empire Wind off New York<\/a>, to move forward. A federal judge ruled that the other, Revolution Wind, a nearly completed Orsted project<\/a> off Rhode Island, could continue.<\/p>\n Still, the intervention in projects where billions of dollars have already been spent has created uncertainty about investing in the United States.<\/p>\n \u201cIn the coming years, nobody will start any new projects in offshore wind in the U.S.,\u201d said Anders Schelde, the chief financial officer of AkademikerPension, a Danish pension fund that invests in green energy. \u201cI\u2019m sure that it will probably also have some impact on other renewables,\u201d he added.<\/p>\n Because the East Coast of the United States was the most promising new offshore market, that shift has big implications for the wind industry in Denmark, whose developers and equipment makers are large-scale participants in the American projects.<\/p>\n Welcon, which fashions giant wind turbine sections called towers in the town of Give, in western Denmark, is supplying Orsted\u2019s Revolution Wind and Sunrise Wind projects but is not expecting any new business from across the Atlantic.<\/p>\n \u201cI don\u2019t believe in the U.S. before we have a new president,\u201d said Carsten Pedersen, the company\u2019s chairman.<\/p>\n Mr. Pedersen said that Welcon\u2019s vast factory in the flatlands of the Jutland peninsula had orders through 2027 but that he worried about the stamina of weaker companies and the lost momentum toward cleaner energy.<\/p>\n \u201cIt\u2019s so sad, I think, what\u2019s happening now,\u201d he said. \u201cWe had a chance to make the green transition.\u201d<\/p>\n