Equinor ASA (NYSE: EQNR), a Norwegian energy giant, announced the cancellation of its offshore wind projects in Spain and Portugal, following a previous similar decision to exit Vietnam.
This strategic withdrawal came at the heels of the company facing mounting costs in the offshore wind sector due to inflation, high interest rates and supply chain delays. The company's head of renewables, Paal Eitrheim, shared these updates in an interview with Reuters on Wednesday.
EQNR Navigates Rising Costs by Exiting Key Wind Markets
Equinor's decision to exit Spain, Portugal and Vietnam highlights the financial challenges currently plaguing the offshore wind industry. The sector has been hit hard by inflation and increased interest rates, causing projects to be more expensive and time-taking.
Eitrheim mentioned that Equinor has been exploring early-stage opportunities across various global markets and confirmed the company's decision to exit Vietnam, Spain and Portugal. He also hinted at EQNR's withdrawal from other markets in the future as part of its efforts to better manage its expenses.
The company has been compelled to reassess its capital allocation priorities as the cost pressures continue to mount. Eitrheim noted that increasing expenses are extending timelines in several global markets.
Equinor's Renewables Ambitions and Adjustments
Despite these exits, Equinor remains committed to its long-term renewable energy goals. The company aims to reach 12-16 gigawatts (GW) of installed renewable energy capacity by 2030. This suggests a significant increase from 0.9 GW in 2023. However, Eitrheim highlighted that the ...
