Ørsted and Skyborn Challenge U.S. Over Halt to Revolution Wind Project

Offshore wind developers Ørsted and its joint-venture partner Skyborn Renewables have initiated legal action against the U.S. government in Washington, D.C. The lawsuit, filed on Thursday, contests a stop-work order issued by the Interior Department that has effectively halted construction on the 704-MW Revolution Wind project, which is intended to provide electricity to Rhode Island and Connecticut.

The complaint asserts that the stop-work order is both unlawful and lacks sufficient evidence, especially given that significant installation work had already been completed. According to the filing, the Revolution Wind project is approximately 80% finished, with all offshore foundations installed and 45 out of 65 turbines erected. The developers have invested roughly $5 billion into the project and warn they could incur an additional $1 billion in costs if the construction freeze continues.

Impact of the Halt on Project Timeline and Finances

The halt presents serious risks for the project, especially regarding construction vessels that are becoming scarce and the potential for delays lasting a year or more. Revolution Wind has secured long-term contracts, with 400 MW allocated to Rhode Island and 304 MW to Connecticut, sufficient to power over 350,000 homes.

The stop-work order was issued last month by the Bureau of Ocean Energy Management (BOEM), citing national security concerns. The Interior Department has refrained from commenting on the lawsuit, which claims the order contradicts prior federal approvals.

Should the installation vessels be redeployed, the timeline for the project could extend significantly, raising the risk of outright cancellation. This legal challenge follows Ørsted’s recent announcement to seek around 60 billion Danish crowns (approximately $9.4 billion) through a rights issue aimed at strengthening its financial position after setbacks in the U.S. market.

In a show of continued support, Norwegian energy giant Equinor has indicated it will participate in this rights issue. Investors reacted negatively to the halt, with Ørsted’s share price plummeting nearly 32% year-to-date following BOEM’s order.

The Revolution Wind project, a 50/50 partnership between Ørsted and Skyborn, represents a significant development in U.S. offshore wind energy and is notable for being the first project halted after substantial construction had already begun. The outcome of this legal action could have far-reaching implications for the future of offshore wind development in the United States.