Wednesday, 12 February, 2025 / Edition 45

I hope those who like American football enjoyed the Super Bowl on Sunday. I am certainly happy to see New Orleans, a key energy town for our industry, re-emerge after the tragic event that happened on the first day of 2025.

Let’s look into two pieces of energy news from this week.

Shangyou Nie

Editor, Well Read

Global Offshore Wind Leader Ørsted to Cut Investment by 25 Percent

Nuttawutt Uttamaharad/ Shutterstock.com

The world leader in offshore wind, Ørsted, announced plans to cut its investment in the sector by 25 percent until 2030. The cuts reflect challenges facing the offshore wind industry—especially following Trump’s re-election.

Ørsted’s decision:

• Ørsted will cut its capital program by 25 percent from 2025–2030 by 25 percent to DKr 210–230 billion ($29.3–32.1 billion), according to the Financial Times.

• The move will scrap Ørsted's previous target of developing 35–38 gigawatts of renewable energy by 2030, already down from the target of 50 gigawatts set prior.

• Ørsted will focus on finishing construction for several ongoing offshore wind projects totaling 8.4 gigawatts of capacity.

• Ørsted said that it would increase its installed wind capacity from 18 gigawatts to more than 27 gigawatts by 2027.

• The company also announced plans to “restore” dividends in 2026.

Ørsted’s previous rise:

• Ørsted was once considered a successful example of transforming a traditional oil and gas company (DONG Energy) into a renewable energy company (Ørsted).

• It assumed its new name in 2017 and is traded on the Oslo Stock Exchange.

• Ørsted’s share price reached a high of 1,250 Danish Krone ($175) per share in January 2021, with a market cap of $74 billion.

Current struggles:

• Over the past four years, Ørsted’s share price dropped 76 percent. Its market cap is now at $18 billion.

• On 1 February 2025, Ørsted appointed a new CEO, Rasmus Errboe, who replaced Mads Nipper as leader of the struggling company.

• In February 2024, Ørsted announced a pause for dividends that will extend until at least the end of 2025. It also announced job cuts.

• In February 2024, Ørsted decided to exit three offshore wind markets in Norway, Spain, and Portugal.

• New CEO Errboe said that Ørsted continues to believe in the long-term future of offshore wind and renewable energy.

What they’re saying:

• “The renewable energy market has fundamentally changed since January 2021. The impacts on our business of the increasingly challenging situation in the offshore wind industry, ranging from supply chain bottlenecks, interest rate increase, to a changing regulatory landscape, mean that our focus has shifted”—Lene Skole, Ørsted Board Chairman

• “We’ll reduce our investment program toward 2030 through a stricter, more value-focused approach to capital allocation”—Errboe.

What to watch:

• Shell also said that it would quit the Atlantic Shores offshore wind project near New Jersey and wrote down $996 million in its Q4 2024 results.

• What might other companies do with their offshore investment projects?

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Three Baltic Countries Cut Ties with Russian Power Grid

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Estonia, Latvia, and Lithuania announced that they have de-linked their power system from the BRELL network, which includes Russia and Belarus.

The latest:

• The three countries synchronized their power system with the Continental Europe network (CEN) via Poland.

• European Commission president Ursula von der Leyen joined the Baltic leaders in Vilnius, Lithuania for the occasion.

• In January 2025, Lithuania decided to raise its defense spending to 5–6 percent of its national economic output in 2025.

• Lithuania became the first NATO nation to vow to reach the 5 percent goal that President Trump has encouraged.

• Lithuania spends a little more than 3 percent on defense now, higher than the 2 percent outlined in the NATO guideline. The guideline was met by 23 NATO countries in 2024.

Background:

• According to Al Jazeera, the three Baltic states first developed the idea of becoming independent of Russian power after Russia annexed the Crimea from Ukraine in 2014. The move accelerated after Russia’s 2022 invasion of Ukraine.

• These countries are considered an “energy island,” because of their geographic location.

• According to the Atlantic Council's research, at least 11 cables running under the Baltic Sea have been damaged since October 2023.

• The three countries have tried to prepare to sever their energy ties with Russia. For example, they installed an LNG receiving terminal in Lithuanian seaport Klaipėda in 2014.

• In April 2022, less than 2 months after the Russian invasion of Ukraine, the three countries announced that they would stop importing Russian gas.

• In January 2025, Poland and nine other E.U. countries pushed for a ban of Russian LNG imports. EU member countries Hungaria and Slovakia are opposing such an energy ban.

What they’re saying:

• “We are now removing Russia’s ability to use the electricity system as a tool of geopolitical blackmail,” said Lithuanian Energy Minister Žygimantas Vaičiūnas.

• “For our people, it is immensely important to know that we are no longer dependent in any way … on the Russian nation,” said Yoko Alender, Estonia’s climate minister.

What to watch:

• A key concern is the safety and stability of energy system for these three “frontier” states bordering Russia.

• Will EU countries really agree to stop importing Russian LNG?

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✉️ To get in touch with Shangyou, send an email to editorial@aapg.org.