Tuesday's Energy Absurdity: More Collapse and General Mayhem at Wind Giant Orsted

Is Mads Nipper the Jimbo Fisher of the Big Wind Industry?

Tuesday's Energy Absurdity: More Collapse and General Mayhem at Wind Giant Orsted

[Follow me on Twitter at @EnergyAbsurdity]

In the cutthroat world of college football coaching, the job of the head coach is always in jeopardy anytime the team fails to live up to expectations. Head coaches tend to find themselves on the so-called “hot seat” whenever their team is projected by the pundits and polls to go, say, 10-2 in a season, but ends up going 5-7 or even 7-5.

Just ask now-former Texas A&M coach Jimbo Fisher, the profession’s highest-paid coach in history, whose teams so dismally under-performed that school officials announced Sunday that they’re going to actually pay him the remaining $76 million on his insane contract if he will just go away. Interestingly, Fisher’s unceremonious canning came slightly less than one year after he had engaged in the tried-and-true strategy of firing his offensive coordinator at the end of the 2022 season, in which the highly touted team finished with a 5-7 record.

Somehow, this all brings me to Big Wind company Orsted, which has fallen on hard times financially and appears to be headed on the fast track to bankruptcy unless it receives bailouts from governments in the US, the UK and Germany, where it has invested in an array of offshore wind projects.

I have written about Orsted and its CEO, Mads Nipper, frequently here in recent weeks, as the company has demanded more subsidies from all these governments, pulled out of partnerships in several projects and cancelled others entirely. The company has also engaged in a series of farmdowns, i.e., the selling off of half-interests in various projects in order to raise cash to service debt recently, a clear signal of pending insolvency.

Today comes two more bits of troubling news about the failing company. First, there is the story at OffshoreWind.biz that Orsted has now pulled out of a Norwegian offshore wind partnership with Fred. Olsen Seawind and Hafslund, a consortium that had plans to develop a portfolio of offshore wind projects around Norway.

“Ørsted have informed us that due to a prioritisation of investments in the portfolio they will withdraw from pursuing participation in offshore wind developments in Norway, and therefore their participation in the partnership will discontinue,” said Norway’s Bonheur in a statement, as reported by OffshoreWind.biz.

But it gets even better. Or worse, depending on your perspective here.

The second bit of news is that Mr. Nipper, the company’s figurative head coach, has decided to jettison his offensive and defensive coordinators in a bid to keep his high-paying job for just a little longer. Bloomberg’s Javier Blas reports in a tweet that “Orsted CFO and COO leave the European wind giant with “immediate effect” after multi-billion write down. The Chairman and the CEO stay.”

Well, of course. This was the logical next step, wasn’t it?

In college football, the firing of one or both coordinators typically gets the head guy another season on the job before he’s handed walking papers of his own by the big-money boosters who really run and fund those programs. Although, Fisher came up two games short of that goal, but will receive $76 million for his troubles, so he probably doesn’t really much care.

For Nipper, who knows? It’s becoming increasingly apparent that, unless there is a radical shift in market conditions or Joe Biden and his handlers decide that Orsted is somehow “too big to fail,” the company itself might not last another year.

For those who haven’t been paying attention before now, this is what happens when governments stupidly try to subsidize a transition of a global energy space worth well more than $300 trillion. Bankruptcies will occur on massive, possibly even national or global scales.

Orsted is merely a big canary in an enormous coal mine.

That is all.