Wind Energy – Acquisition
Equinor has bought a 9.8% stake valued at around $2.5 billion in Danish offshore wind farm developer Orsted.
Orsted shares have dropped 69% from their 2021 all-time high as the offshore wind sector has faced surging costs and technical problems with turbines.
But Equinor said its share acquisition was a long-term bet on the sector after the Norwegian company made slow progress on reaching its ambitious renewable energy targets.
The transaction would count towards Equinor’s renewable energy portfolio target, adding 1.7 gigawatt (GW) of net generation capacity out of the company’s goal of installing 12-16 GW by 2030, CEO Anders Opedal told Reuters.
At the end of 2023, the company had less than 1 GW of installed renewable capacity.
“We see this as a good counter cyclical move at this point to get into a very attractive portfolio,” Opedal said.
Orsted’s share price rose more than 8% on the news before paring gains to stand 5.8% higher at 1300 GMT. Equinor’s shares fell by 3.9%.
An Orsted spokesperson declined to comment.
Equinor said it did not plan to raise its stake beyond 10% and would not seek board representation.
The world’s biggest offshore wind developer was last year hit by costs and project delays as inflation raised the price of turbines and other equipment and services.
“The offshore wind industry is currently facing a set of challenges, but we remain confident in the long-term outlook for the sector, and the crucial role offshore wind will play in the energy transition,” he said.
The investment makes Equinor the second largest shareholder in Orsted after the Danish government.
