TPI Files Bankruptcy, Ørsted Fundraising Round

The crew discusses TPI Composites' chapter 11 bankruptcy filing and
Ørsted's $9 billion fundraising amid financial challenges. Joel
gives an update about the 2026 Melbourne Wind O&M Conference.
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today. Now here's your hosts, Alan Hall, Joel Saxon, Phil Totaro,
and Rosemary Barnes.  Allen Hall: Welcome back to the
Uptime Wind Energy Podcast, Joel Saxon. Is in Australia. You want
to tell everybody where you're at at the moment?  Joel
Saxum: Yeah, we're down in Melbourne. I'm here with Matthew
Stead from Ping as well. Uh, Rosemary was supposed to join us, but
uh, of course she's under the weather. Uh, but we are down here
doing basically a, a tour to Melbourne, uh, I guess you could say,
of the wind industry. So if you don't know in Australia, a lot of
the wind operators, uh, and ISPs, uh, and OEMs, to be honest with
you. Are located here in Melbourne, uh, and we are talking to them
all about the conference that we're gonna put on this February. Uh,
it is a, the, the new and improved version of
the, [00:01:00] uh, successful one we did last year. So
we're taking the feedback that we got right after the event last
year, uh, connecting with these, uh, all the stakeholders down here
and seeing what do they, what do they want to hear for the next
one? What did we do well? What could be better? Uh, we're looking
at venues, we're doing kind of all the above to get this, uh.
Conference up and running, and I know, uh, Matthew and I, I think
we've had four to five meetings a day, every day. Um, thank you to
the people that we've met with, if you're listening, because it's
been really good for us, uh, very engaging, lots of feedback. So I
think we've got a, we've got a good list of speakers lined up and
then also, um, content for next year. That's great. So what we're
looking at right now as well, uh, if you're inking this on your
calendar. For the, uh, wind energy o and m 2026 conference here in
Melbourne is February 17th and 18th. This year we're gonna do two
full days of, uh, panel discussions, round tables, and all kinds of
information sharing. [00:02:00] Uh, the goal, of course, just
like last year, gather up some of the smartest people in wind and
share strategies that you can take back, uh, for operations and
maintenance and, and action within your company.  Allen
Hall: And Phil Tarro of Intel stores out in California. And
Phil, this has to be one of the. Busiest weeks in wind on the
investor side. So much happening. Osted, uh, is going to issue a $9
billion emergency fundraising round. And I want you to frame this a
little bit. I, I, I've heard so much on the news and been reading a
lot about this, but there's several undertones, several things
happening at the same time and there really hasn't been a clear
path as to why. Osted has decided to go forward on this fundraising
round?  Phil Totaro: Well, effectively it stems from two
big things. One is obviously they had shown some financial losses,
uh, recently, and this is going back a couple
of [00:03:00] years now that had necessitated. You know,
companies like EOR coming in and taking a 10% stake, um, just to
bolster them again, we, we talked on the show before about the fact
that they're not necessarily wanting to take over, although now
there's some people in, you know, Denmark, that are kind of pushing
the Danish government to sell off their chunk. And the presumption
is that it would be sold to, to somebody like eor. So we'll still
see if that's possible or even. You know, uh, likely to happen, but
there's a project here in the United States called Sunrise Wind,
which Ted was hoping to sell off a chunk of to a co-investor and.
Because of some of the rule changes around, um, tax credit
qualification, they're probably not going to be able to move
forward in the way that they had hoped to, um, with that stake
sale. And as a result, [00:04:00] it's leading them to
absorb a lot of the, um. You know, financial losses from, you know,
some of the delays and, and other issues that they've had with
getting a lot of these offshore projects, you know, uh, up and
running. Uh, it's, it's kind of forcing them to do this capital
raise to be able to provide themselves with enough cash to be able
to continue operating. The  Allen Hall: Sunrise Wind
Project was a partnership between Orit and Eversource, and
Eversource pulled out of that roughly a year ago. And the other
one, which had a partner that, uh, Ted had who pulled out was for
Ocean Wind one and two, which was PSEG, which is a New Jersey power
company. Eversource being a northeastern power company, essentially
those two pulled out like in 2023 and 2024 when the price of steel
went up, inflation was high, the cost of the projects went up. So
they've been out for a little while still. [00:05:00] It
was in that interim that Osted just wasn't able to find anybody to
join in on those projects. And it does seem strange, and again, I
want to get to this point. All the US investment and offshore, all
the US companies are all out. Basically you have EOR and you have
Osted Dominion. Dominion. Okay, that's true. But Di Dominion is
sort of a different animal.  Phil Totaro: The the reality
is, yes, is the short answer to your question, Ellen, that they,
they had tried to find another co-investor after, um, Eversource
pulled out. The challenge with that was that there. Has has also
been, um, an effort by the project developers to try and
renegotiate the PPA prices. Eversource was gonna be one of the main
off takers for this. They don't wanna have to absorb a
significantly higher price. And then have to find ways of
passing [00:06:00] that on to to customers. And it's also
what led to this challenge of sted not being able to find a new
co-investor after Eversource pulled out. Um, you know, with
interest rates being so high. And not being able to renegotiate the
PPA anymore. Y you know, the developers that are still, you know,
have their lease areas and, and are pursuing their projects.
They're locked in to whatever they've got at this point. If nobody
else wants to come on board, then it's up to Ted to basically eat
the entire cost of this thing and thus, you know, a major
contributor to the capital raise. Allen Hall: So the
discussion online is that the Trump. Administration sort of forced
this to happen. That isn't necessarily correct. I think a lot of
this has started a year or two ago. You remember also. Phil with
Ocean Wind one and two, the exit fees with the state of New Jersey.
I think that Osted was [00:07:00]going to have to pay
somewhere around $300 million to the state of New Jersey, and I
think they ended up paying less than half of that at the end. But
it's still a lot of money. There's a lot of money in exit fees that
Osted has paid over the last two years roughly, or, or buybacks.
They, they paid Eversource to get  Phil Totaro: out.
Essentially just to also clarify, you know, what, what the
administration's done has not helped. I think we can all agree on
that. The, but the reality of it is that yes, they, they were
already in a bad situation that got made even worse by. Increasing
the risk of, you know, particularly a foreign investor coming in
and, and being a co-investor in, in this project. Obviously there
are any number of utility companies in the United States that could
have, you know, uh. Co-invested in, in this project along with
Sted. They chose not to because they don't like the economics of
offshore wind.[00:08:00] Uh, and that's just the, the reality at
this point in time. Uh, I mean, duke Energy this week, or I guess
last week as, as this episode airs also just announced that they're
gonna cancel their two North Carolina projects because of the same
thing. It's, it's basically down to the economics of the project.
And at the end of the day. If you've got somebody in the
administration that's making, you know the, the investment
environment look even worse than what it already was before he even
came into office, then it's going to necessarily, you know, take
more options off the table for. Potential investors that could have
come in and at least helped, uh, kind of share the, the risk and,
and, you know, reduce the amount of, of capital outlay that OSTED
would've had to make just by themselves. In my  Joel
Saxum: mind, with this new kind of like P-T-C-I-T-C cliff
coming, there's no [00:09:00] reality where, uh, capital
gets cheap enough, interest rates get low enough in time for any of
that to change like that, that's just not gonna happen. We've got
18 months and we need to, it would have to come down by percentage
points, not basis points. And I don't think that's going to,
there's no reality of that happening. I think  Allen
Hall: that's true, generally speaking. Right? But I think the
problem is, is where are the New York's and the Massachusetts of
the world gonna be able to get power from? They need this, they
really do need offshore wind. The prices of electricity there, uh,
if you're a consumer, is about $300 a megawatt hour. That's what I
was paying in Massachusetts to buy power on the grid. So $150 a
megawatt hour coming off of the, uh, you know, offshore wind farm.
Yeah, wholesale still is, is high compared to other parts of the
United [00:10:00]States, but as it's half of what I was paying
as the consumer.