CS WIND, a global wind tower and offshore wind substructure manufacturing corporation, has had its supply contract for wind turbine structures intended for a U.S. offshore wind farm fall through. This is interpreted as a consequence of the inauguration of the Donald Trump administration's second term, which is not favorable toward renewable energy, particularly wind power.
According to the Financial Supervisory Service's electronic disclosure system on the 5th, CS WIND reported that it received a notice of termination for the supply contract disclosed on Nov. 7, 2024, on the 28th of last month, resulting in the immediate termination of the contract.
CS WIND did not disclose the amount of the terminated contract, but the securities industry estimates that the scale was substantial.
CS WIND is a company that recorded sales of approximately 3.07 trillion won last year, with an operating profit of 275.4 billion won.
Mirae Asset Securities noted in a report released on that day that "this contract was part of a project expected to recognize sales from 2026, so it does not have a significant immediate impact on the company's performance," adding that "the key to driving CS WIND's performance lies in onshore wind towers in the U.S. and offshore wind substructures in Europe."
Concerns have also been raised that the termination of this contract was foreseeable. President Trump has claimed since his candidacy that "wind turbines are unattractive, expensive, and harmful to wildlife." Additionally, on Jan. 20 (local time) shortly after his inauguration, he declared an immediate halt to new wind energy projects in federal jurisdictions through an executive order. He also ordered a review of the environmental impact and economic viability of wind projects.
According to the executive order, all new and renewal applications for approval, leasing, and lending for wind projects in federal waters and territories have been suspended. Consequently, nearly all offshore wind projects are effectively stalled since all coastal (continental shelf) areas suitable for offshore wind installation fall under federal jurisdiction.
The previous administration of President Joe Biden had set a goal to establish a total of 30 gigawatts (GW) of offshore wind capacity by 2030 and approved permits for 11 large-scale wind power complexes during its term. It also provided tax credit benefits included in the Inflation Reduction Act of 2022.
Thanks to these measures, wind power became one of the fastest-growing energy sources in the U.S.; however, it is currently facing difficulties due to high interest rates, inflation, and supply chain bottlenecks. Trump's executive order is expected to present another massive barrier to the wind power industry. In response, TotalEnergies in the U.S. has postponed its planned offshore wind energy development for four years, among other repercussions.
ClearView Energy Partners, a research-focused corporation, projected that challenges for the U.S. offshore wind industry could become prolonged. The Energy Economic Research Institute also indicated in a recent report that while President Trump has long criticized wind power vigorously, this executive order is assessed to be far more extensive than anticipated.
As of the end of the third quarter of 2024, CS WIND's order backlog includes $873 million (approximately 1.27 trillion won) for wind towers and $544 million (approximately 791.8 billion won) for offshore wind substructures, totaling about 2 trillion won.
Considering the uncertain situation in the U.S., the securities industry reports that additional new orders from the European market appear necessary. According to financial information provider FnGuide, CS WIND's sales for this year are expected to be approximately 3.08 trillion won, similar to last year.