Offshore Wind Giant Orsted Sues Trump Administration

The wind farm Revolution Wind, under development by Ørsted, would serve Connecticut and Rhode Island. (Connecticut Wind Collaborative)

For the first time, a company is taking on President Donald Trump directly in his battle against the wind industry.

The outcome could determine if wind power—the largest source of utility-scale renewable energy in the U.S.—is still a viable industry in the United States.

Danish energy company Orsted sued the Trump administration on Thursday, claiming that the stop-work order the government issued last month for its offshore wind farm off of New England was unlawful. Revolution Wind, which would provide power to Connecticut and Rhode Island, was forced to halt work last month despite being 80% complete.

The Department of the Interior said the wind farm raised national security issues, without giving additional details. It’s the second time the department has suddenly stopped an offshore wind project that was under construction. The first one was resolved after political jockeying.

The Department of the Interior declined to comment Thursday.

Orsted says it has already spent or committed $5 billion on the project and was on track to turn it on next year, providing enough power for around 350,000 homes. If the project is canceled, Orsted anticipates incurring another $1 billion in breakaway costs. In addition, the region’s grid operator has said that canceling the project will raise risks to grid reliability.

The cancellation was just the latest blow for Orsted, whose stock has crashed 48% in the past year. The company is trying to raise $9 billion from investors to prop up its finances. Fellow energy company Equinor and the Danish government, which owns a majority of its shares, have said it will buy into the offering.

In the lawsuit, Orsted notes that the Department of Defense, along with about a dozen other state and local agencies, already signed off on the project after years of reviews. Orsted says there’s no legal basis to stop the project, and that the Trump administration hasn’t identified one. The order was based largely on Trump’s longstanding personal antipathy for wind power, Orsted argues.

Orsted stock was up 4% on Thursday.

Write to Avi Salzman at avi.salzman@barrons.com