US Suspends Offshore Wind Leases in New Setback for Industry (3)

The US is suspending leases for all five wind farms under construction off the East Coast, the latest blow to an industry that’s been targeted repeatedly by the Trump administration as part of its attack on clean energy.

The US Interior Department announced the move Monday, citing national security concerns as the massive turbines may interfere with radar systems. The suspension will let the administration work with developers and states to mitigate any security risks, the department said in a statement.

The projects impacted are Vineyard Wind 1 off Massachusetts; Coastal Virginia, which lies off the coast of its titular state; Revolution Wind, near Rhode Island; and Empire Wind 1 and Sunrise Wind, both off the coast of New York. The five projects represent about $28 billion in total committed capital, according to BloombergNEF.

Shares of offshore wind companies slumped. Orsted A/S, the Danish company co-developer of Revolution Wind, declined 13%. Danish turbine maker Vestas Wind Systems A/S slipped 2.7% while Dominion Energy, developer of Coastal Virginia, fell 3.7%.

The suspensions raise a fresh question mark over the future of an emerging sector that’s been in Donald Trump’s sights even before he was elected to his second term as president. Trump has openly expressed disdain for wind power and imposed restrictions on offshore projects within hours of taking office in January, leading to various legal challenges. A federal judge ruled earlier this month that the president’s ban on new projects was illegal.

Wind turbines at Vineyard Wind 1 offshore wind farm off the coast of Massachusetts in July.

Photographer: Carolyn Kaster/AP Photo

It remains to be seen if citing national security will be a more legally durable way to keep wind turbines out of US waters. The effect that offshore wind can have on radar has been known for years, said Pavel Molchanov, an analyst at Raymond James.

“I’m skeptical that there is any new information about the military concerns all of a sudden that singlehandedly warrants projects being halted,” he said. “We know the administration is not a fan of offshore wind, to put it mildly.”

European nations have had coastal wind farms for years and haven’t experienced problems, according to Lara Skinner, executive director of the Climate Jobs Institute at Cornell University.

“All of these projects have gone through extensive review, including from the Department of Defense,” she said in an interview, referring to the suspended US projects.

Analysts at Jefferies said in a research note that “the language used by the administration and prior experience on stop orders should bring some optimism projects could restart quickly.”

Read More: Can Trump Foil the US Wind Industry He Loathes?: QuickTake

Lawmakers criticizing the suspension included Chris Murphy, a Democratic senator from Connecticut, who predicted another court battle over what he called an “illegal order” to stop projects that are almost complete.

“Trump’s war on wind [is] unhinged and totally illegal,” he said in a post on X.

New York Governor Kathy Hochul said “there’s no credible justification” for curtailing work on the projects. “The real threat to national security is in undermining our energy independence,” she wrote on X.

Empire Wind, which is being developed by Norwegian oil giant Equinor ASA, was halted earlier this year, only to see work resume after Hochul reached a deal with Trump to support new natural gas pipeline capacity in her state.

Offshore wind projects prompted national security concerns under previous administrations. The Defense Department during President Joe Biden’s term in office pushed successfully for changes to leases being sold along the West Coast to address some of the issues.

“These towers are gargantuan,” Interior Secretary Doug Burgum said in an interview with Fox Business Monday. “One can understand how they would create issues for radar.”

“The movement of massive turbine blades and the highly reflective towers create radar interference called ‘clutter,’” the Interior Department said in its statement.

Dominion said it received an order to suspend work on the project for 90 days. The move, the company said, “will threaten grid reliability for some of the nation’s most important war fighting, AI, and civilian assets.”

Equinor said it’s evaluating the order and seeking more information from the government. Orsted and Vineyard didn’t respond to requests for comment.

Read More: Orsted Jumps After US Judge Rules Wind Farm Work Can Resume

The wind industry is a significant economic driver, according to Skinner, and the order will now threaten workers’ livelihoods.

“This is really concerning,” she said. “There are people out there working on these projects, and now they’re not working and not getting paid, right before the holiday.”

--With assistance from Kellie Lunney and Monique Mulima.

To contact the reporters on this story:
Josh Saul in New York at jsaul15@bloomberg.net;
Will Wade in New York at wwade4@bloomberg.net

To contact the editors responsible for this story:
Simon Casey at scasey4@bloomberg.net

Joe Ryan

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