EDPR suspends US offshore project awaiting better winds

EDP ​​Renováveis ​​(EDPR) has suspended its offshore wind project in the US, which could cause a four-year delay.

The Southcoast Wind project, off the coast of Massachusetts, has a planned capacity of 2.4 gigawatts. The company was expected to begin construction this year and be operational by 2030.

This means that the project in partnership with Engie (through the Ocean Winds consortium) will eventually be resumed when there is a new president in the White House in 2029, as the next elections will take place in November 2028.

“It is prudent to assume a four-year delay. Obviously that is the worst-case scenario,” EDPR’s CEO said on a call with analysts on Wednesday, adding that the power sales agreement (PPA) was “ready to sign” at a “good price.”

“The project is ready to move forward, but with everything that happened with the executive orders we decided to be more cautious,” added Miguel Stilwell d'Andrade in the call.

Donald Trump will not be able to run for a third term, as the 22nd Amendment of the US Constitution prohibits a president from serving more than two terms. However, there is a movement in the country that advocates a third term and he himself has been mentioning the subject.

“It will be the greatest honor of my life to serve, not once, but two, three or four times,” Donald Trump said in January. “Can I run again?” he asked at another event this month.

Donald Trump has paralyzed the wind sector in the United States, wrote the “Wall Street Journal” this week, reporting on the many reluctance that developers currently face in the United States to develop their projects at sea, but also on land.

Since Donald Trump's election, several companies have suspended their offshore projects, such as the French company TotalEnergies, which also suspended a project for 4 years, or the Danish company Orsted, which decided to postpone the start of the project until the second half of 2027, having registered an impairment of 1.7 billion dollars. The oil company Shell assumed an impairment of 500 million dollars for its offshore wind project. But there are other companies suspending/cancelling projects, including the Norwegian company Equinor, the British oil company BP, and Avangrid, controlled by the Spanish company Iberdrola.

The Journal writes that work is ongoing on projects that have already begun, but that “there is confusion” in the industry about what comes next. While most onshore wind projects are on private property, many require federal permits, such as a construction permit from the Army Corps of Engineers, an environmental permit from the U.S. Fish and Wildlife, the Bureau of Land Management for the power grid, or the Federal Aviation Administration for an aircraft easement.

EDP ​​Renováveis ​​recorded losses of 556 million euros in 2024 in terms of non-recurring net income, with impairments recorded in the offshore operation in the USA and the cancellation of the onshore wind operation in Colombia, the company announced on Wednesday.

On a recurring basis, the company saw profits plunge 57% to 221 million euros, with “operational performance not being sufficient to offset lower asset turnover gains vs. 2023 and higher financial results”.

Faced with losses, the company presented a plan to turn things around: over the next two years, the pace of new plants will fall to a total of 3.5 gigabytes, with Capex remaining at 3 billion euros this year and below this value in 2026.

In terms of asset rotation, the plan is to sell more than 2.5 gigabytes to raise more than 3 billion euros in 2025/2026.

The company highlighted the new power record reached in 2024: 3.8 gigabytes.

The company clarifies that it was negatively impacted by non-recurring items in the order of 777 million euros related to the “impairment in offshore in the USA, as well as the decision not to proceed with the remaining investments necessary to build the 0.5 gigawatt wind projects in Colombia, resulting in a total impact of 590 million euros between impairments, provisions for guarantees yet to be incurred and taxes”.

Regarding the US, he added that the impairment was 133 million euros at EDPR level due to a “preemptive decision by Ocean Winds”, the consortium with Engie, “in the offshore business in the US due to the uncertainty surrounding offshore projects in the US following the presidential executive orders issued on January 20”.

The company said revenues increased 4% to 2.32 billion with increased electricity production being “partially offset by lower prices”.

Non-recurring EBITDA fell 16% to more than 1.5 billion, with impairments and provisions rising more than 60% to more than 1.5 billion.

Regarding the dividend, the company will propose to its shareholders the “continuation of the Scrip Dividend program with a payout of 40%, which implies a dividend proposal of €8 cents per share”.

EDPR’s output rose 6% in 2024 compared to 2023, reaching over 36 TWh. The majority of this came from onshore wind (85%), with solar PV accounting for 15%. In 2024, new solar power accounted for almost 75% of new capacity.

EDP ​​Renewables’ (EDPR) US output soared 17% in 2024, reaching more than 18,000 GWh. The US accounted for 50% of EDPR’s electricity output last year, totaling 36,000 GWh.

In terms of installed capacity, EDPR has 44% of its installed power in the US (8.4 gigawatts out of 19.3 gigawatts in total), with the majority coming from onshore wind (over 5.9 gigawatts) and solar (2.5 gigawatts).