The US government has put a stop to leases for five wind farms currently under construction off the East Coast. This decision is part of a broader challenge faced by the clean energy sector, which has been frequently targeted by the Trump administration.
The Interior Department announced this suspension on Monday, citing national security issues, stating that the large wind turbines might interfere with radar systems. They mentioned that this pause would allow the government to collaborate with developers and states to address any potential security concerns.
As a result, stocks of offshore wind companies dropped significantly. Orsted A/S, a Danish firm co-developing the Revolution Wind project in Rhode Island, fell by 13%. Vestas Wind Systems A/S, another Danish company that produces turbines, saw a decline of 2.7%, while Dominion Energy, which is developing the Coastal Virginia Offshore Wind project, dropped by as much as 5.8%.
This suspension is another setback for the emerging US offshore wind industry. President Trump has shown a strong disapproval for this sector, enforcing restrictions almost immediately upon taking office this year, which has led to various legal battles. A federal judge recently ruled that Trump's ban on new projects was illegal.
It's unclear if citing national security will provide a more sustainable legal basis to exclude wind turbines from US waters. Pavel Molchanov, an analyst at Raymond James, noted that the issues related to offshore wind affecting radar have been known for quite some time. He expressed doubt about any new military concerns justifying the halt of these projects.
According to Lara Skinner, the executive director of the Climate Jobs Institute at Cornell University, European countries have had offshore wind farms for years without any problems. She mentioned that many of these projects have undergone thorough reviews, including assessments from the Department of Defense.
Analysts at Jefferies commented in their research note that the language used by the administration and past experiences with stop orders might indicate that the projects could resume quickly.
Lawmakers have spoken out against the suspension, including Chris Murphy, a Democratic senator from Connecticut, who anticipated another legal feud over what he termed an “illegal order” to halt nearly finished projects. He described Trump's actions against wind energy as “unhinged and totally illegal” in a post on social media platform X.
New York Governor Kathy Hochul also criticized the move, stating that there’s “no credible justification” for stopping the work on these projects. She argued that undermining energy independence is the real national security threat.
Concerns about offshore wind farms have arisen under previous administrations as well. The Defense Department, when led by former President Biden, successfully pushed for adjustments to leases sold along the West Coast to address various issues.
Interior Secretary Doug Burgum highlighted that these massive towers could indeed pose radar issues. He mentioned this during an interview with Fox Business.
The suspended projects include Vineyard Wind 1 off Massachusetts, Revolution Wind, Coastal Virginia, Empire Wind 1, and Sunrise Wind, both located off New York.
The Interior Department explained that the large turbine blades and reflective towers cause radar interference known as "clutter."
Dominion Energy reported receiving a 90-day order to suspend work on its project, warning that this could jeopardize grid stability for crucial military, AI, and civilian operations.
Equinor stated that it is reviewing the order and seeking more information from the government. Orsted and Vineyard did not respond to requests for comments.
The wind industry is a significant economic force, and this order could jeopardize the livelihoods of many workers. Skinner expressed concern for those who are now sidelined from work right before the holidays, highlighting the importance of these projects.