Orsted Lawsuit Targets Trump Wind Freeze, Raises US Power Risk

Orsted seeks injunction after US offshore wind lease freeze

Orsted has filed a lawsuit seeking an injunction after the Trump wind suspension order triggered a US offshore wind lease freeze that halted work on the company’s $5 billion Revolution Wind offshore project. The filing, made on Friday, Jan. 2, 2026, raises a new operational risk for US power planning as developers and utilities reassess construction schedules, costs and funding.

The Orsted Revolution Wind lawsuit targets the federal decision to suspend project leases for five large offshore wind developments under construction off the US East Coast. Revolution Wind is being built through a 50-50 joint venture between Orsted and Skyborn Renewables, a unit backed by Global Infrastructure Partners, and the complaint was filed in the US District Court for the District of Columbia.

Project was 87% complete with commissioning expected in January

Orsted said Revolution Wind was about 87% complete when the suspension order landed, with the project expected to begin generating electricity as soon as January 2026. The venture said it has spent and committed billions of dollars after clearing what it described as a thorough review process, leaving it exposed to stop-work costs and potential re-mobilisation expenses.

Court timing is now a market variable. An early injunction could allow final work and power-up to proceed before weather and vessel schedules become less flexible, while a longer pause would likely push commissioning deeper into 2026 and raise total costs.

National security concerns hinge on radar interference

Federal officials said the suspension followed Pentagon complaints that offshore wind infrastructure can interfere with radar. The concern cited was the movement of large turbine blades and the reflective towers that support them, which can affect radar signals and complicate the detection and tracking of security threats.

For investors, the issue is that mitigation can change economics late in the build. Adjustments to turbine placement, hardware, operating restrictions or monitoring systems can add cost, delay completion and alter the risk profile of similar projects that are already under contract.

Orsted’s financing history heightens sensitivity to delays

Offshore wind projects require large up-front spending before revenue begins. Orsted has been squeezed by inflation, higher interest rates, supply chain delays and regulatory headwinds, and it raised 60 billion Danish crowns ($9.4 billion) in a discounted share issue last year to strengthen its finances.

That backdrop increases the penalty for schedule slippage. Each month of delay extends the period in which capital is tied up without generation cash flow, while interest expense accrues and contractors can reprice vessel time and labour. These pressures can widen renewable bond spreads and the spread demanded by investors in renewable bonds and other long-duration funding tied to construction risk.

Utilities face a cost gap when contracted wind output is deferred

The fastest spillover tends to land on utilities and power buyers that expected output from the project. When a near-complete wind build is paused, buyers often need replacement supply, typically gas-fired generation, shorter-term power purchases or higher-cost imports through the grid.

Those substitutions can lift utilities procurement costs, fuel and hedging costs and, in regulated markets, feed into future rate filings. Even when costs are deferred, uncertainty can raise the risk premium on utility equities and on project-linked bonds that depend on predictable commissioning dates.

Supply chain exposure extends beyond the project owner

A stop-work order can also hit turbine component suppliers, installation contractors, export cable providers and specialised vessel operators. Idle time reduces utilisation and can pressure near-term margins; a restart with a compressed timeline can have the opposite effect, tightening capacity and lifting costs as multiple projects compete for scarce vessels and crews.

This feedback can slow the broader US offshore wind pipeline. If developers expect a higher probability of late-stage interventions, they may demand higher returns, renegotiate power contracts or delay final investment decisions, raising the sector’s cost of capital.

Policy risk now sits alongside rates as a pricing input

In 2025, the biggest headwinds for offshore wind were macro, especially rates and construction inflation. The lease freeze adds a political layer that can persist even if financing conditions improve. Orsted’s shares fell 13% on Monday after the Dec. 22 suspension announcement, highlighting how quickly perceived permitting reliability can change valuations.

Orsted said Sunrise Wind, another US offshore project that received a lease suspension order, is evaluating its options. The breadth of any policy stance matters for markets: a narrow, project-specific outcome is easier to discount than a framework that remains broadly applicable.

What to watch next

The first catalyst is the court schedule in Washington and whether interim relief is granted to allow work to continue. The second is whether federal agencies and developers outline a practical radar-interference mitigation template that reduces uncertainty for projects already under construction. Third, watch how utilities adjust procurement and hedging plans, because replacement costs can flow through to earnings and, over time, customer bills. Finally, monitor funding conditions for project finance and for corporate bonds across the renewables supply chain.