Feds' stop-work order for Revolution Wind adds to uncertainty for wind industry

The Trump administration’s order to halt construction of the nearly completed Revolution Wind offshore wind farm has injected new uncertainty into an already shellshocked U.S. industry, and heightened spillover concerns about Long Island projects.

The U.S. Bureau of Ocean Energy Management, which administers offshore energy-leasing programs for the federal government, on Friday issued the order calling for a “halt to all ongoing activities” for Revolution Wind to “address concerns that have arisen” during the department’s review of Trump’s executive order freezing wind-energy leasing and permitting in January.

The order applies only to construction in the deep waters off the New England coast where project developer Orsted says 80% of the work is complete.

The department’s letter to Orsted, which is 50.1% owned by the government of Denmark, said BOEM is “seeking to address concerns related to the protection of national security interests of the United States and prevention of interference with reasonable uses of the exclusive economic zone, the high seas, and the territorial seas …”

With Revolution Wind having 45 of a planned 65 turbines already installed, Orsted said it was “evaluating all options” to resolve the matter “expeditiously,” while noting the project would require final $794 billion to complete. Half the project is owned by finance giant Blackrock’s Global Infrastructure Partner’s Skyborn Renewables.

Orsted also owns South Fork Wind, a 130-megawatt project producing energy under contract to LIPA. Revolution Wind plans to deliver energy to power 350,000 homes in Rhode Island and Connecticut. 

Gov. Kathy Hochul’s office, which earlier in May brokered an effort to restart work halted by Trump on a project off Long Island’s coast called Empire Wind, on Monday said it was “monitoring the [Revolution] situation closely.” Hochul spokesman Ken Lovett said the state “remains committed to keeping our two offshore wind projects moving forward.” Empire developer Equinor owns a 10% stake in Orsted.

The spillover concern is warranted, observers say. Orsted is the sole developer of Sunrise Wind, a project whose energy is destined for Long Island, and which has nearly completed all land-based construction. The bulk of offshore work, which has already begun, was is expected to take place over the next year.

But financial uncertainty appears deepening. Orsted earlier this month said after an unsuccessful effort to find a partner to complete development of Sunrise wind that it would instead issue new stock to raise some $9.4 billion in capital, the bulk of which, $6.2 billion, would be used to complete Sunrise Wind.

Orsted’s stock price sank to record lows on that news, and on Monday retreated even further. The company in its Friday statement said that despite the stop-work order, it will proceed with preparation for the stock offering, noting that it “has the continued support and commitment” from its “majority shareholder, the Danish state.”

A Sunrise Wind spokeswoman didn’t immediately comment on any potential impact on Sunrise Wind.

Dan Panico, supervisor of Brookhaven Town, which has worked with Orsted on a long-term host benefits package valued at more than $169 million, including around $130 million for the town, said news of the Revolution halt “is a concern because of the agreement we reached which would benefit all the taxpayers of Brookhaven Town.”

“We’re keeping a watchful eye on it,” he said, although "ultimately it’s up to the federal government, which sets the policy.”

Business, environmental and labor groups with a stake in offshore wind also were quick to worry about spill-over impacts.

“The ripple effects of this decision will be felt across the entire country," Sean McGarvey, president of North America’s Building Trades Unions said in a statement. “If President Trump can do this to an almost-finished energy project, he will do it to more projects in other sectors, too, and every owner, investor, and contractor at every project stage should be deeply concerned.”

Bruce Afran, an attorney for fishing and community groups suing Equinor and the federal government over Empire Wind, said he plans to use the latest language from BOEM’s letter in his lawsuit seeking an injunction to stop construction of Empire Wind, the project 14 miles from Long Island whose energy is destined for New York City.

Afran’s lawsuit, including on behalf of the Long Island Commercial Fishing Association, argues that because Equinor is an “instrumentality or agency of the Kingdom of Norway and is under Norway’s control and dominance,” it “cannot receive a lease on the Outer Continental Shelf” to develop power under federal law. Norway owns 67% of Equinor’s stock directly and “maintains active control over the company’s business affairs,” the suit says.

“There’s no logical reasoning why the same argument doesn’t apply to Empire Wind,” perhaps more so, said Afran, adding he plans to file a motion on the matter. Equinor declined to comment.

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.