After U.S. President Donald Trump’s decision to exit the Paris climate accord threw into doubt the future of renewable energy, Vestas Wind Systems A/S the world’s biggest maker of wind turbines, dropped to its lowest in more than 1 1/2 months.
As of 12:53 p.m. in Copenhagen, trading 2.3 percent lower at 571.50 kroner were the shares of Vestas which fell as much as 3 percent. It was among the biggest losers in the Stoxx Europe 600 index, which was up about 0.7 percent overall and was the worst performing stock on the Copenhagen benchmark index of Denmark’s most traded companies.
Arguing it puts American workers at a disadvantage, Trump said late on Thursday he would pull the world’s biggest economy out of the Paris climate pact. With Nordic politicians, in particular, condemning the move, Trump’s announcement instantly drew severe criticism from leaders across the globe. “Regardless” what Washington D.C. decides, he’s planning a trip to the U.S. in the fall in an effort to promote renewable energy at the state level, says Lars Chr. Lilleholt, Energy Minister of In Denmark where Vestas is based.
“Of course it would be better if the U.S. were to stay in the Paris Agreement,” Morten Dyrholm, Vestas senior VP marketing, communications and public affairs, said.
40 percent of its revenue from the Americas is derived by Vestas. After it was clear that Trump was the winner of the U.S. election in November, shares in the company plunged. This was so because Trump has lashed out against wind turbine technology in the past. There was little economic sense in a withdrawal from the climate pact, Vestas said.
“The U.S. wind industry has broad bipartisan support because it is cost-effective and provides strong returns for investors,” Dyrholm said. Wind is “the lowest-cost energy source in many parts of the country; it’s compatible with farming, ranching, and hunting; it uses no water; it supports more than 100,000 jobs in 50 states, and it brings billions of dollars in economic development to the communities that host the projects.”
Kepler Cheuvreux analyst Douglas Lindahl said to the media that Vestas’s share-price decline provides an “excellent buying opportunity”. The same principle was applicable for shares of Gamesa Corp Tecnologica SA, a Spanish rival, which traded about 1 percent lower. He said.
“More than 190 nations have signed the Paris agreement and the U.S. now joins a very small club of outsiders not part of the accord,” Lindahl said.
Trump campaigned on a pledge to support coal instead of renewable energy and had famously called climate change a “hoax” cooked up by the Chinese. He wants to “start to negotiate and we will see if we can make a deal”, he said in his speech on Thursday.
Only two other countries in the entire world – Syria and Nicaragua, are not participating and are not signatories to the agreement and Trump’s withdrawal from the pact puts the U.S. in league with just thozse two nations.
(Adapted from Bloomberg)