Orsted Surges After US Judge Rules Wind Farm Work Can Resume

Orsted A/S shares surged after a US judge ruled construction can continue on a nearly completed wind farm off the coast of Rhode Island, quashing an effort by the Trump administration to halt the project.

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Orsted said late Monday it would resume work following a ruling that the Revolution Wind project could suffer “irreparable harm” unless construction was allowed to continue for now. Work can continue during a lawsuit challenging the government’s Aug. 22 order.

The decision will be a relief for the beleaguered company, which is in the process of raising $9.5 billion from shareholders to shore up its balance sheet after President Donald Trump’s moves against the offshore wind sector upended its business model. It helps give investors confidence that two critical projects under construction in the US will actually go ahead, rather than face further costly delays or even cancellations.

“Orsted won an important victory last night,” Jacob Pedersen, head of equity analysis at Sydbank A/S, said in a note. “Remaining risks may still make life difficult for Orsted, but the risk of a credit rating downgrade to junk should actually be reduced slightly.”

The shares climbed as much as 12% at the open on Tuesday in Copenhagen, before paring their gains to 6.4%. Orsted has declined about 35% this year.

The threat of further intervention remains. A White House spokesperson said the ruling “will not be the final say on the matter.”

“While the judge’s injunction should provide near-term relief to Orsted shares, this does not protect Revolution from the outcome of the ongoing legal case, nor possible further actions from the US government,” Jenny Ping, analyst at Citi, said in a note.

In an interview with Bloomberg TV earlier this month, Interior Secretary Doug Burgum noted that five offshore wind farms in the US were under review.

“It’s likely that there won’t be future offshore wind built in America,” Burgum said.

Revolution Wind LLC, co-owned by Orsted and Global Infrastructure Partners, had claimed the administration violated its constitutional right to due process by abruptly blocking construction. The company also said the stop-work order violated federal law because it was “arbitrary and capricious,” following years of planning and coordination with the government. The project was 80% complete.

US District Judge Royce Lamberth, an appointee of former President Ronald Reagan, issued a preliminary injunction after concluding that Revolution Wind was likely to win the case.

In a prospectus last week, Orsted said it estimates delays on Revolution Wind — intended to power hundreds of thousands of homes in Rhode Island and Connecticut — cost it $25 million a week. It cited additional spending on the project and indirect expenses at its other major undertaking in the US, the Sunrise Wind farm off New York.

Orsted’s US projects make up about 20% of the 8.1 gigawatts of offshore wind farms the company is currently building. Once complete, those projects will deliver as much as 12 billion Danish kroner ($1.9 billion) of earnings per year, the company said in a presentation earlier this year.

Since coming into office for a second term in January, Trump has made a series of orders targeting the offshore wind industry including halting new leases of seabed and federal permits for existing leases. Industry executives had assumed that projects that were already fully permitted, would be shielded from the administration’s antipathy toward offshore wind.

Read More: Orsted’s American Dream Becomes a Multibillion-Dollar Nightmare