Burned by wind, oil giant rethinks the power market

 The shifting winds of the Trump-era energy transition were on full display during Equinor’s quarterly earnings call today.

The Norwegian oil and gas giant said it has finished installing foundations at Empire Wind, a massive offshore wind project off New York that President Donald Trump temporarily halted earlier this year. It also signaled it intends to play a more active role at Ørsted after buying more shares in the troubled Danish offshore wind developer.

But even as Equinor said it was sticking with offshore wind, company executives made clear there are limits to their support.

Equinor will invest little money in the industry beyond its three projects in construction: Empire Wind in the U.S., Dogger Bank off the United Kingdom and Baltyk in Poland.

A company official also expressed hesitancy about investing in the power sector more broadly, even as vast amounts of capital pour into the industry to meet the needs of electricity-hungry data centers. Equinor is a large gas producer and recently established a business division to evaluate power sector investments. But unlike its reaction to the green energy bubble five years ago, the company’s chief financial officer made clear Equinor is not planning to jump headlong into the electricity business anytime soon.

“I have to be very clear that we have no intentions to significantly step up investments into this area,” Torgrim Reitan said, after a financial analyst asked if the company would redeploy money once earmarked for offshore wind to other investments in the power sector.

Oil prices are down, he noted, making it “very important” for the company to be cautious about how it spends its money.

Equinor is a key barometer of the energy transition. The Norwegian company was among a wave of European-based oil companies to plunge into renewable energy five years ago, only to pull back when the sector failed to generate the kind of profits oil companies are accustomed to.

Reitan’s comments are notable because they come at a time when Wall Street is dumping money into utilities to meet the electricity needs of artificial intelligence. They signal that after being burned by investments in renewable energy over the last five years, Equinor is wary of investing in electricity generation, which has a fundamentally different business model than oil and gas production.

Equinor nevertheless is sticking with offshore wind, unlike fellow European oil majors like BP and Shell.

Reitan’s comments about Equinor’s decision to maintain a 10 percent stake in Ørsted showcased how the oil giant is thinking about the industry.

“The offshore wind industry is living through its first real downturn with a lot of challenges,” Reitan said. “We also do think that this industry needs consolidation. We do think that a closer collaboration industrially and strategically between Ørsted and ourselves.”

He added: “In the current environment, we are going to limit sort of capital commitments into offshore wind. It is an industry that is challenged.”