Orsted Venture Wins Court Ruling to Restart Wind Farm Work (2)

Orsted A/S said it will resume work on its nearly-completed wind farm off the coast of Rhode Island after a US judge ruled construction can continue during a lawsuit challenging the Trump administration’s stop-work order, a major win for the beleaguered Danish energy giant.

A federal judge in Washington on Monday agreed that the Revolution Wind LLC project co-owned by Orsted and Global Infrastructure Partners could suffer “irreparable harm” without a court order allowing it to complete construction while the case proceeds. Work was paused by the government on Aug. 22 despite being 80% finished.

Orsted said in a statement issued after the decision that it would resume construction “as soon as possible.” The company’s American Depository Receipts rose as much as 10%.

US District Judge Royce Lamberth in Washington said the Orsted-backed venture is entitled to an injunction because it demonstrated it was likely to win the lawsuit. The judge, an appointee of former President Ronald Reagan, also said the company is “likely to suffer irreparable harm” without an injunction and that maintaining the status quo for now “is in the public interest.”

The ruling comes at a crucial time for Orsted, which is in the process of raising $9.5 billion (60 billion Danish kroner) from its shareholders to shore up its balance sheet after the Trump administration’s moves against the offshore wind sector upended its business model. In a prospectus on the offering released last week, the company disclosed that it estimates delays on Revolution Wind cost the company $25 million per week due to additional spending on the project and indirect costs to its other major undertaking in the US, the Sunrise Wind farm off the New York coast.

Read More: Orsted’s American Dream Becomes a Multi Billion-Dollar Nightmare

The company had said that if the order isn’t lifted by late September, it may face significant new costs and delays related to the project and may have to renegotiate contracts with suppliers as well as face penalties for delivering power to customers later than promised. If the company cannot complete work as scheduled, Orsted may incur so many additional costs that the company would have to cancel the project altogether, the prospectus warned.

US Problems

Neither the White House nor the Interior Department immediately returned messages seeking comment on the ruling, which may be appealed.

Issues in the US have been at the center of the company’s problems. A move by President Donald Trump’s administration to stop work at another offshore wind farm earlier this year made it impossible for Orsted to find buyers for a stake in its New York project. That left a hole in the company’s finances, leading it to raise money from investors instead.

Revolution Wind sued Sept. 4, hours before a separate case was brought by Rhode Island and Connecticut, two states that are relying on the project to power hundreds of thousands of homes. The cases have kicked off a broader legal battle over Trump’s recent orders against wind power, which he has long opposed.

The wind energy venture argued in its lawsuit that the government’s sudden halt to construction after years of coordination with multiple administrations violates the company’s constitutional due process rights.

Revolution Wind said it has already spent or committed about $5 billion on the project and will lose more than $1 billion in breakaway costs if it’s canceled.

“The court today unequivocally affirmed what we all have seen since this baseless stop work order was first issued,” Connecticut Attorney General William Tong, who filed the parallel state lawsuit, said in a statement. “The Trump Administration’s erratic action was the height of arbitrary and capricious, and failed to satisfy any statutory provisions needed to halt work on a fully approved and nearly complete project.”

(Updates with Orsted statement starting in the first paragraph.)

To contact the reporters on this story:
Erik Larson in New York at elarson4@bloomberg.net;
Mark Chediak in San Francisco at mchediak@bloomberg.net;
William Mathis in London at wmathis2@bloomberg.net

To contact the editors responsible for this story:
Ben Bain at bbain2@bloomberg.net

Elizabeth Wasserman, Anthony Aarons

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