Shares in Orsted rose as much as 12% today after a US federal judge ruled that it can resume work on the almost completed Revolution Wind project halted by US President Donald Trump's administration last month.
The ruling is a legal setback for Trump, who has repeatedly criticised wind farms as ugly, unreliable and expensive, leaning on federal agencies to curb development of wind power projects.
For Orsted, however, it is a significant win. The offshore wind power developer has been losing $2m a day since the US Bureau of Ocean Energy Management (BOEM) issued its work-stop order on August 22, citing unspecified national security concerns.
The Revolution Wind project, located 15 miles off the coast of Rhode Island, was 80% complete at the time, with all offshore foundations in place and 45 of 65 wind turbines installed.
The Danish company and joint venture partner Skyborn Renewables have already spent or committed about $5 billion on the project, which would incur over $1 billion in breakaway costs if cancelled, according to US court filings by the companies.
Orsted was struggling to avoid a potentially crippling credit rating downgrade even before the work-stop order. Squeezed by inflation, higher interest rates and supply chain delays, Orsted asked shareholders in August for a $9.4 billion injection.
Once the fully guaranteed rights issue is completed, the company will have a liquidity reserve of 145 billion crowns ($22.9 billion), which finance chief Trond Westlie said was enough to complete existing projects.
"As a result of the Court's decision, Revolution Wind will be able to resume construction as BOEM (the US 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," an Interior spokesperson said.
Lawyers for the Trump administration had argued that the project, located off the coast of Rhode Island, failed to comply with conditions of its permit related to conflicts with national security and scientific ocean surveys.
Revolution Wind disputed those claims.
At the end of a two-hour court hearing in Washington, Lamberth issued a preliminary injunction that blocks the Trump administration from enforcing the order to halt construction.
Lamberth, a senior judge appointed by Republican President Ronald Reagan, said the Trump administration had offered contradictory reasons for issuing its stop work order, and that the explanations offered weeks after the halt were "the height of arbitrary and capricious" government conduct.
He also said Revolution Wind had reasonably relied on government assurances that were withdrawn without due process, imperiling a $5 billion investment.
"If Revolution Wind cannot meet benchmark deadlines, the entire project could collapse," Lamberth said. "There is no doubt in my mind of irreparable harm to the plaintiffs."
Orsted and its joint venture partner Skyborn Renewables had asked for a preliminary injunction in a lawsuit they filed earlier this month challenging the US Interior Department's stop-work order.
"Revolution Wind will resume impacted construction work as soon as possible, with safety as the top priority," an Orsted spokesperson said in a statement, adding that it would continue to seek a resolution with the administration.
Rhode Island and Connecticut have also sued the administration over the stop work order.
Connecticut Governor Ned Lamont issued a statement praising the ruling.
"Today's ruling allowing Revolution Wind to resume work is extremely encouraging for workers and our energy future. We will continue to engage with the federal government on a durable path forward for this project and on shared energy priorities," Lamont
