The victory of Donald Trump in the US Presidential elections delivered a shock wake-up for the stocks of European companies working in clean and renewable energies, due to investors’ fear over a possible overturn of renewable and climate policies in the US.
Danish companies Orsted and Vestas and Portuguese company EDP Renovaveis were among the worst hit by investors fretting. Orsted lost 10% upon opening, while Vestas dropped 8% and EDP 7.7%, making them the biggest decliners on the pan-European STOXX 600 index. Other companies that are exposed in the US, like the German Nordex and RWE also had a bad day at the stock exchange.
During his campaign Donald Trump vowed to tear down offshore wind projects and roll back on climate regulations, including the Paris Agreement, during his first day in office. Biden’s Inflation Reduction Act (IRA) will also probably be scrapped or modified. The IRA provides subsidies and incentives to build clean and renewable energy projects.
Several projects under the IRA are already underway and may go on despite Trump’s changes in policies, but projects not set for completion before 2029 may be more in jeopardy. Nordex commented to Reuters via a spokesperson that there could be some delays in customer decisions due to possible uncertainty over regulations. Before the election, Vestas and Orsted said that they don’t expect a change in demand for green energy in the US, regardless of who is in charge.
