Shares of Danish offshore wind developer Ørsted surged 6% on Tuesday after a U.S. federal court cleared the company to resume work on its nearly completed Revolution Wind project, delivering a crucial legal victory that eases fears of multibillion-dollar losses and offers a reprieve to an industry under growing political and financial strain.
The ruling allows construction to restart on the 704-megawatt offshore wind farm, which is designed to supply electricity to Rhode Island and Connecticut and power about 350,000 homes. Built with Siemens Gamesa turbines, Revolution Wind had been halted following a December 22 decision by the U.S. Interior Department to suspend five offshore wind leases, citing national security concerns.
Judges rejected those arguments, echoing a September court decision that had also blocked an earlier attempt by the administration of U.S. President Donald Trump to stop the project. In both cases, the courts found that the government failed to provide sufficient justification for disrupting projects that were already far advanced.
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“Now our focus is on safely resuming construction work as soon as possible and moving towards delivering reliable and affordable electricity to 350,000 homes,” Ørsted CEO Rasmus Errboe said in a statement late Monday, underlining the company’s urgency to contain further delays and cost overruns.
A broader test case for U.S. offshore wind
The Ørsted ruling has implications far beyond a single project. It is one of several lawsuits brought by offshore wind developers and U.S. states seeking to overturn the Interior Department’s suspension of leases, a move that rattled investors and highlighted the growing policy risks facing renewable energy in the United States.
The suspension also hit Equinor’s Empire Wind project off New York and Dominion Energy’s Coastal Virginia Offshore Wind facility. Following the Ørsted decision, Equinor shares rose about 3%, reflecting market hopes that the legal reasoning could extend to other cases.
An Equinor spokesperson said the company was taking note of the ruling and awaiting a court decision expected later this week on Empire Wind. That 810-megawatt project was more than 60% complete when it was halted in late December. Equinor has warned that any delay beyond January 16 could force termination of the project, potentially triggering losses of $5.3 billion.
Analysts say the Ørsted ruling significantly reduces the risk of Revolution Wind being cancelled, an outcome that would have cost the company around 20 billion Danish crowns ($3.12 billion), according to Sydbank analyst Jacob Pedersen. The decision has also raised expectations of a favorable outcome for Ørsted’s larger Sunrise Wind project, with JP Morgan noting that investors were likely already pricing in a positive ruling.
Financial pressure and credit risk remain
Even with the legal win, Ørsted’s challenges are far from over. The company has been grappling with inflation, higher interest rates, and supply chain disruptions that have pushed up project costs across the offshore wind sector. These pressures have strained balance sheets and forced developers globally to renegotiate power purchase agreements or pause investments.
Last autumn, Ørsted raised $9.4 billion through a rights issue to bolster liquidity and protect its credit profile. Despite that move, it has struggled to attract co-investors for Sunrise Wind, a difficulty analysts link to regulatory uncertainty and political resistance in the United States.
Credit rating agencies have responded cautiously. S&P Global downgraded Ørsted to BBB, the lowest investment-grade rating, in August. On Monday, Moody’s cut its outlook on the company to negative from stable, citing heightened risk that U.S. political opposition could delay or derail offshore wind projects, including Sunrise Wind.
Analysts warn that a further downgrade would increase borrowing costs and weigh on earnings, compounding the financial strain at a time when Ørsted is already navigating a challenging operating environment.
President Trump has been openly hostile to wind power, frequently attacking turbines as unattractive and inefficient, and his administration’s actions have added a layer of uncertainty to long-term renewable investments.
Thus, the offshore wind industry episode reinforces concerns that policy support can no longer be taken for granted, even for projects nearing completion. While the legal system has, for now, acted as a backstop against abrupt regulatory reversals, developers and investors remain exposed to shifting political winds.
In the near term, the decision restores momentum to Revolution Wind and offers a boost to sector sentiment. Over the longer term, however, Ørsted’s experience highlights a deeper challenge: offshore wind in the United States is no longer just a question of engineering and financing, but a test of how resilient climate and energy policy remains in an increasingly polarized political landscape.