Mads Nipper, the CEO of Danish renewable energy company Orsted, is stepping down as pressure mounts following weak financial results and the return of President Donald Trump to office.
He’ll be replaced by Rasmus Errboe after four troubled years in the role.
The Danish company has faced significant setbacks recently as it grapples with high interest rates and it faces a shifting renewable energy landscape under the Trump administration.
Earlier this month, Orsted announced that it had suffered a $1.7 billion impairment in its U.S. business in the fourth quarter, which caused its shares to plummet more than 13%.
Orsted’s shares have fallen 83% since its peak four years ago.
“The impacts on our business of the increasingly challenging situation in the offshore wind industry, ranging from supply chain bottlenecks, interest rate increases, to a changing regulatory landscape, mean that our focus has shifted,” Lene Skole, chair of Orsted’s board, said in a statement on Friday.
From fossil fuels to wind
The renewables company is majority-owned by the Danish government and was earlier known as Danish Oil and Natural Gas, which, as the name suggests, was focused on fossil fuels.
From the late 2000s, Orsted began building wind farms, making it the world’s largest offshore wind developer. Having set up sprawling wind projects in Denmark, Orsted widened its scope to other parts of the world.
However, its expansion in the U.S. has faced many setbacks. Orsted characterized it as the “most painful part of its portfolio,” resulting in multi-billion-dollar write-offs. It also pushed other leaders out of the company, including its CFO and COO.
In late 2023, it wrote off $4 billion on two New Jersey wind projects. Several months later, Nipper announced a strategic pivot, promising to turn Orsted into a “more efficient organization” by laying off people and exiting some European markets. Despite the financial hit, Orsted hasn’t wound up operations in the U.S. market.
While the broader renewable energy industry shares some of Orsted’s pains, Tancrede Fulop, a senior equity analyst at Morningstar, said Nipper created other challenges by reassuring investors when impairment and cancellation costs kept adding up.
“New leadership can move the needle by ensuring strong execution on projects under construction, especially in the U.S. Giving more clarity on investments’ funding and ruling out a rights issue would also help," he said.
The struggles aside, Orsted is still growing. In the first nine months of 2024, it made a profit of 6.1 billion Danish kroner ($85 million).
Now, Trump’s halt on federal permits and leasing areas for offshore wind projects poses fresh challenges to Orsted’s teething pains in the U.S.
“We’re not going to do the wind thing. Big, ugly windmills. They ruin your neighborhood,” the President said, according to Reuters.
Still, Trump’s withdrawal from renewables might be overstated, Henrik Andersen, CEO of Vestas, a Danish wind turbine maker with operations in the U.S., told CNBC last week. He added that the energy transition is still underway despite soaring financing costs.
Representatives at Orsted pointed Fortune to its press release from Friday when approached for comment.
