Wind energy stocks slump as Trump halts offshore projects again
The US Department of the Interior announced that it is halting all offshore wind leases in the United States, citing "national security risks identified by the Department of War in recently completed classified reports."
The orders, which were sent by the Interior Department's Bureau of Ocean Energy Management (BOEM), suspended all large-scale offshore wind projects for 90 days. The BOEM reserves the right to extend the 90-day suspension.
According to the Interior Department, unclassified reports from the US government "have long found that the movement of massive turbine blades and the highly reflective towers create radar interference called ‘clutter.’”
These clutters can obscure legitimate moving targets and also generate false targets in the vicinity of offshore wind projects, the agency added.
The Interior Department said that it will work with relevant government agencies, leaseholders and state officials "to assess the possibility of mitigating the national security risks posed by these projects."
“The prime duty of the United States government is to protect the American people,” Secretary of the Interior Doug Burgum said in a statement.
“Today’s action addresses emerging national security risks, including the rapid evolution of the relevant adversary technologies, and the vulnerabilities created by large-scale offshore wind projects with proximity near our east coast population centers.”
Wind power stocks immediately slid after the announcement was made. Danish energy company Orsted (ORSTED) fell more than 11%, while shares of Dominion Energy (D) dropped 3.7%.
Orsted is overseeing two of the five projects that got halted and Dominion is the lead developer on one of them.
Wind energy companies make their case
One of these developments that Orsted is overseeing is the massive Revolution Wind project off the coast of Rhode Island.
The Trump administration had previously halted it back in August, despite the project being 80% completed, with Orsted saying that all offshore foundations had been installed and 45 out of 65 wind turbines were already installed as well.
However, a federal judge in September granted Orsted's request for a temporary injunction, saying in his ruling that the Interior Department did not present “any factual findings” to back up its claim that the project presented any national security risks.
The project is expected to supply power to over 350,000 homes in both Rhode Island and Connecticut.
Revolution Wind is an American subsidiary of Orsted based in Rhode Island. Sunrise Wind, another project that was halted by the Trump administration, is a New York-based subsidiary of the Danish company.
Orsted responded to the latest action by the Interior Department by saying that it is "complying with the respective orders and are taking appropriate steps to suspend related activities in a manner that prevents impacts on health, safety, and the environment."
"Orsted is evaluating all options to resolve the matter expeditiously, together with its partners," the company said in a statement. "This includes engagement with BOEM and other permitting agencies as well as the evaluation of potential legal proceedings."
The company noted that both Revolution Wind and Sunrise Wind are in advanced stages of construction and will be ready to deliver power in 2026. Revolution Wind is on track to be completed in January.
"Orsted is investing in American energy generation, grid upgrades, port infrastructure, and a supply chain, including US shipbuilding and manufacturing, extending to more than 40 states," the company added. "Revolution Wind and Sunrise Wind employ hundreds of local union workers supporting construction activities."
Meanwhile, Dominion Energy, which is the lead developer of the Coastal Virginia Offshore Wind Project (CVOW) said in a statement that the project "is essential for American national security and meeting Virginia’s dramatically growing energy needs, the fastest growth in America."
The company pointed to the fact that it will be providing power for the world’s largest warship manufacturer and also the largest concentration of data centers in the world.
"Stopping CVOW for any length of time will threaten grid reliability for some of the nation’s most important war fighting, AI, and civilian assets," the company said. "It will also lead to energy inflation and threaten thousands of jobs."