Orsted Venture Wins Court Ruling to Restart Wind Farm Work (4)

Orsted A/S 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 agreed on Monday that the Revolution Wind project, intended to power hundreds of thousands of homes in Rhode Island and Connecticut, could suffer “irreparable harm” unless construction was allowed to continue for now. Work was paused by a government order 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%.

Revolution Wind LLC, co-owned by Orsted and Global Infrastructure Partners, claims in the suit that President Donald Trump’s administration violated its constitutional right to due process by abruptly blocking construction. The company also claimed the stop-work order violated federal law because it was “arbitrary and capricious,” following years of planning and coordination with the US government.

US District Judge Royce Lamberth issued a preliminary injunction after concluding that Revolution Wind was likely to win the case. The judge, an appointee of former President Ronald Reagan, also said the company is “likely to suffer irreparable harm” without an injunction, siding with the venture’s key argument.

Maintaining the status quo “is in the public interest,” the judge said.

A White House spokesperson said the ruling “will not be the final say on the matter.”

“President Trump was elected with a resounding mandate to end Joe Biden’s war on American energy and restore our country’s energy dominance — which includes prioritizing the most effective and reliable tools to power our country,” Anna Kelly said in a statement.

Since taking office in January, Trump has issued a flurry of orders designed to stymie the US offshore wind business. The president has long despised the industry, claiming that massive wind turbines kill birds, cause cancer and drive whales “crazy.”

Continental Shelf

“As a result of the court’s decision today, Revolution Wind will be able to resume construction” as the Bureau of Ocean Energy Management “continues its investigation into possible impacts by the project to national security and prevention of other uses on the Outer Continental Shelf,” the Interior Department, which oversees the agency, said in a statement.

The ruling comes at a crucial time for Orsted, which is in the process of raising $9.5 billion (60 billion Danish kroner) from 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 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 expenses at 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 delays and may have to renegotiate contracts with suppliers as well as face penalties for delivering power to customers later than promised. If the company can’t 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

Issues in the US have been at the center of the company’s problems. A move by the Trump 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.

Rhode Island and Connecticut filed a parallel lawsuit against the Trump administration on the same day, seeking to restore what the two New England states describe as a vital future power source. 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 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.”

(Updates with comment from White House.)

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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