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Equinor (EQNR) and Eneco Exit Dutch Offshore Wind Tender
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Equinor ASA (EQNR - Free Report) , in partnership with Dutch utility company, Eneco, has announced its withdrawal from the ambitious 4-GW offshore wind tender in the Dutch North Sea.
The decision marks a significant turn of events for the renewable energy sector in the Netherlands, particularly given the size and potential impacts of the project within the IJmuiden Ver wind farm zone.
The tender, which opened its doors for bids in February and concluded on Mar 28, has been a focal point for the development of renewable energy infrastructure in the region. Eneco, a prominent player in the Dutch renewable energy landscape, has been at the forefront of offshore wind power development in the Netherlands for over a decade.
Currently operating four offshore wind farms and in the process of constructing a fifth, Eneco, together with Equinor, initially aimed to expand their portfolios through the acquisition of the new 4-GW wind farm located approximately 60 kilometers off the Dutch coast.
However, the partnership faced significant hurdles that led to their withdrawal. Eneco cited several factors that contributed to the decision, including rising raw material costs, supply-chain issues, and the prevailing uncertainty around the future price and demand for electricity. High borrowing rates have also played a role in undermining the financial viability of the project.
In light of these challenges, Eneco has urged the Dutch government to reevaluate the structure of its offshore wind tenders. The company argued that the current focus on the price offered by builders is excessive and that the scale of tenders should be limited to around 1 GW to mitigate risk. This suggestion comes as the tenders for wind farms have grown significantly, with the latest tender for the 4GW project being the largest the Netherlands has seen to date.
Despite these setbacks, the ambition to expand offshore wind capacity in the Dutch North Sea remains strong. Eneco's existing projects have already contributed to increasing the region's capacity to nearly 5 GW, and the Dutch government has set a target to reach 21 GW by 2031. The government noted that there was considerable interest in the project from multiple builders, though it remains unclear how many will proceed with their bids.
The withdrawal of Equinor and Eneco from the 4GW tender signals a pivotal moment in the Dutch offshore wind sector, highlighting the need for strategic adjustments in the tendering process and project scale to ensure the sustainable growth of renewable energy infrastructure in the region.
Price Performance
EQNR shares have underperformed the industry in the past six months. The stock has lost 11.6% against the industry’s 1.9% growth.
Global Partners (GLP - Free Report) is a leading operator of gasoline stations and convenience stores. Over the past 30 days, GLP has witnessed upward earnings estimate revisions for 2023 and 2024, respectively.
The Zacks Consensus Estimate for Global Partners’ 2024 and 2025 earnings per share (EPS) is pegged at $3.90 and $4.47, respectively. GLP currently has a Zacks Style Score of A for Value.
Murphy USA Inc. (MUSA - Free Report) is a leading independent retailer of motor fuel and convenience merchandise in the United States.
The Zacks Consensus Estimate for MUSA’s 2024 and 2025 EPS is pegged at $26.32 and $27.94, respectively. The company has a Zacks Style Score of B for Value, Growth and Momentum. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.
Sunoco LP (SUN - Free Report) is among the biggest motor fuel distributors in the U.S. wholesale market in terms of volumes. By distributing more than 10 fuel brands via 10,000 convenience stores under long-term distribution contracts, the partnership will continue to generate a stable cash flow.
The Zacks Consensus Estimate for SUN’s 2024 and 2025 EPS is pegged at $4.96 and $4.40, respectively. The stock has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days. SUN currently has a Zacks Style Score of A for Momentum and B for Value.
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Equinor (EQNR) and Eneco Exit Dutch Offshore Wind Tender
Equinor ASA (EQNR - Free Report) , in partnership with Dutch utility company, Eneco, has announced its withdrawal from the ambitious 4-GW offshore wind tender in the Dutch North Sea.
The decision marks a significant turn of events for the renewable energy sector in the Netherlands, particularly given the size and potential impacts of the project within the IJmuiden Ver wind farm zone.
The tender, which opened its doors for bids in February and concluded on Mar 28, has been a focal point for the development of renewable energy infrastructure in the region. Eneco, a prominent player in the Dutch renewable energy landscape, has been at the forefront of offshore wind power development in the Netherlands for over a decade.
Currently operating four offshore wind farms and in the process of constructing a fifth, Eneco, together with Equinor, initially aimed to expand their portfolios through the acquisition of the new 4-GW wind farm located approximately 60 kilometers off the Dutch coast.
However, the partnership faced significant hurdles that led to their withdrawal. Eneco cited several factors that contributed to the decision, including rising raw material costs, supply-chain issues, and the prevailing uncertainty around the future price and demand for electricity. High borrowing rates have also played a role in undermining the financial viability of the project.
In light of these challenges, Eneco has urged the Dutch government to reevaluate the structure of its offshore wind tenders. The company argued that the current focus on the price offered by builders is excessive and that the scale of tenders should be limited to around 1 GW to mitigate risk. This suggestion comes as the tenders for wind farms have grown significantly, with the latest tender for the 4GW project being the largest the Netherlands has seen to date.
Despite these setbacks, the ambition to expand offshore wind capacity in the Dutch North Sea remains strong. Eneco's existing projects have already contributed to increasing the region's capacity to nearly 5 GW, and the Dutch government has set a target to reach 21 GW by 2031. The government noted that there was considerable interest in the project from multiple builders, though it remains unclear how many will proceed with their bids.
The withdrawal of Equinor and Eneco from the 4GW tender signals a pivotal moment in the Dutch offshore wind sector, highlighting the need for strategic adjustments in the tendering process and project scale to ensure the sustainable growth of renewable energy infrastructure in the region.
Price Performance
EQNR shares have underperformed the industry in the past six months. The stock has lost 11.6% against the industry’s 1.9% growth.
Image Source: Zacks Investment Research
Zacks Ranks & Stocks to Consider
Equinor currently carries a Zacks Rank #4 (Sell).
Investors interested in the energy sector may look at some better-ranked companies mentioned below. These three companies presently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Global Partners (GLP - Free Report) is a leading operator of gasoline stations and convenience stores. Over the past 30 days, GLP has witnessed upward earnings estimate revisions for 2023 and 2024, respectively.
The Zacks Consensus Estimate for Global Partners’ 2024 and 2025 earnings per share (EPS) is pegged at $3.90 and $4.47, respectively. GLP currently has a Zacks Style Score of A for Value.
Murphy USA Inc. (MUSA - Free Report) is a leading independent retailer of motor fuel and convenience merchandise in the United States.
The Zacks Consensus Estimate for MUSA’s 2024 and 2025 EPS is pegged at $26.32 and $27.94, respectively. The company has a Zacks Style Score of B for Value, Growth and Momentum. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.
Sunoco LP (SUN - Free Report) is among the biggest motor fuel distributors in the U.S. wholesale market in terms of volumes. By distributing more than 10 fuel brands via 10,000 convenience stores under long-term distribution contracts, the partnership will continue to generate a stable cash flow.
The Zacks Consensus Estimate for SUN’s 2024 and 2025 EPS is pegged at $4.96 and $4.40, respectively. The stock has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days. SUN currently has a Zacks Style Score of A for Momentum and B for Value.