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Empire Wind 1, South Brooklyn Marine Terminal face $763

million

impairment

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Regulatory changes impact future US offshore wind projects

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Equinor ( EQNR ) halts Empire Wind 2 development plans

By Gwladys Fouche

OSLO, July 23 (Reuters) - Norway's Equinor ( EQNR )

booked on Wednesday a $955 million impairment on an offshore

wind project in the United States, citing U.S. tariffs and the

uncertainty of the U.S. regulatory environment under President

Donald Trump.

Hopes the industry had harboured that projects in the United

States would revive the sector were dashed on Trump's first day

back in office in January when he suspended offshore wind

leases.

Then in April, Interior Secretary Doug Burgum shut down

Equinor's ( EQNR ) Empire Wind development in New York state. He later

lifted the stop-work order on the project.

For Equinor ( EQNR ), however, the damage has been done.

On Wednesday, it reported its net operating income for the

second quarter fell due to having to book a near-billion dollar

impairment on its U.S. offshore wind projects.

"This is impacted by an impairment of $955 million due to

regulatory changes causing loss of synergies from future

offshore wind projects and increased exposure to tariffs,"

Equinor ( EQNR ) said in a statement on Wednesday.

"Of this, $763 million is related to Empire Wind 1/South

Brooklyn Marine Terminal project and the remainder is related to

the Empire Wind 2 lease."

Equinor ( EQNR ), majority-owned by the Norwegian state, had won a

federal lease for Empire Wind in 2017 under Trump's first

administration and secured approval for its investment plans in

2023 during former President Joe Biden's time in the White

House.

The global offshore wind market, once touted by governments as a

cornerstone of efforts to cut carbon emissions, has faltered

under escalating costs and logistical setbacks.

Equinor CFO Torgrim Reitan said the U.S. administration

changing its mind on developing offshore wind had affected the

value of the group's large onshore terminal in South Brooklyn,

built to serve offshore wind farm installations.

"It is a result of changing regulations so there is very

little probability for more offshore wind projects coming in the

U.S. over the foreseeable future and that is impacting a project

that we have related to staging facilities," he told Bloomberg

TV.

Equinor ( EQNR ) would not develop the second phase of the Empire

Wind farm, as it had earlier planned, he added.

"We don't intend to push it forward currently," Reitan said

of Empire Wind 2.

The total book value after the latest impairments was $2.3

billion, Equinor ( EQNR ) said on Wednesday.

With a planned installed capacity of 810 megawatts, Empire

Wind 1 could generate enough electricity to power half a million

homes a year and was expected to begin operating in 2027.

Equinor ( EQNR ) on Wednesday also reported a decline in core

second-quarter results, as expected, due to lower oil prices.