Ørsted Warns of Rising Costs Following U.S. Stop-Work Order on Revolution Wind Project

Ørsted said it could face up to $25 million in additional weekly costs after the U.S. government ordered a halt to construction on the 704-megawatt (MW) Revolution Wind project off the coast of Rhode Island. In a prospectus released Monday, the Danish renewable energy developer said its 50% stake in the joint venture with Skyborn Renewables, part of Global Infrastructure Partners, may lead to recurring capital expenditures of up to $15 million per week until late September 2025. An additional $10 million in potential costs could also arise due to vessel delays affecting the separate Sunrise Wind project. The U.S. Bureau of Ocean Energy Management (BOEM) issued a stop-work order on August 22, pausing all offshore construction activities, despite the project previously receiving all necessary federal and state approvals, including BOEM’s own clearance of the Construction and Operations Plan in November 2023. Ørsted said in the filing that the halt has introduced “significant uncertainty” regarding the timeline, costs, and overall feasibility of Revolution Wind. The company also cautioned that the move could have material impacts on its financial performance, credit ratings, and longer-term business outlook. “If the order remains in effect through late September 2025, we estimate additional capital expenditures of up to $15 million per week on our 50% share,” Ørsted stated. “The situation may also create a further knock-on effect on our Sunrise Wind project, resulting in additional costs of up to $10 million.” Revolution Wind is 80% complete, with all offshore foundations installed and approximately 70% of turbines erected. The project represents a $5 billion investment for Ørsted and is backed by 20-year power purchase agreements to deliver 400MW to Rhode Island and 304MW to Connecticut. Commercial operations had been scheduled for the second half of 2026. Ørsted warned that a prolonged delay could increase the risk of missing key vessel windows for installing offshore substations and cables, potentially incurring penalties under the PPAs. In a worst-case scenario, the company said cancellation of the project could result in more than $500 million in break costs and losses exceeding $3 billion on its share alone. Such an outcome would also lead to impairment charges on the DKK 8 billion book value of Ørsted’s stake and accelerate decommissioning obligations. The company reported that it has already spent or committed roughly $2.5 billion on Revolution Wind and acknowledged broader reputational risks. “The order may negatively impact our reputation, investor confidence, and ability to raise external financing or maintain our credit ratings,” the filing said. Legal steps have already been initiated. On September 3, the joint venture issued a notice of intent to sue the U.S. government, and the following day filed a complaint in the U.S. District Court for the District of Columbia. A motion for a preliminary injunction was submitted on September 5, with a decision expected in the coming weeks. Ørsted said there is no assurance of success and warned that appeals could be “lengthy, costly, and unpredictable.” The company also noted the possibility of similar regulatory actions impacting its other U.S. projects. Revolution Wind, LLC is currently complying with the federal order while seeking a legal resolution. “We aim to resolve the matter expeditiously and continue construction towards the planned 2026 commissioning,” the company stated.

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