Orsted has warned it faces up to $25m in additional weekly costs after the US government ordered construction to stop on the 704MW Revolution Wind project off Rhode Island.
The developer stated in a prospectus on Monday that its 50% share of the joint venture with Global Infrastructure Partners’ Skyborn Renewables could result in recurring additional capital expenditures of up to $15m each week the order remains in place until late September 2025.
This could be worsened by a further $10m in knock-on costs for the Sunrise Wind project due to vessel delays.
The Bureau of Ocean Energy Management issued the stop work order on 22 August, halting all activities on the outer continental shelf despite the project already securing federal and state permits, including BOEM approval of its Construction and Operations Plan in November 2023.
Revolution Wind is 80% complete with all offshore foundations installed and around 70% of its turbines erected, according to Ørsted.
The $5bn investment for Ørsted’s share was expected to generate annual EBITDA of around DKK1bn, with commercial operations scheduled for the second half of 2026 under 20-year power purchase agreements supplying 400MW to Rhode Island and 304MW to Connecticut.
Ørsted said the order has introduced “significant uncertainty” around the project’s timeline, costs and feasibility, and warned it could materially affect business activities, results, credit ratings and prospects.
If the order is not lifted by late September, the company expects “significant additional costs” and risks of delays to the remaining offshore substation and array cable installation due to vessel availability, as well as potential penalties under the PPAs.
The developer cautioned that further delay could make the 2026 commercial operation date “significantly more uncertain” and that in a worst-case scenario the project could be cancelled, triggering break costs of more than $500m and total losses exceeding $3bn on Ørsted’s 50% share.
Cancellation would also mean recognising impairment charges on the DKK8bn book value of the stake and earlier-than-planned decommissioning costs.
Ørsted said knock-on delays to Sunrise Wind could push back turbine installation schedules and revenues for that project.
The group has already spent or committed around $2.5bn on Revolution Wind to date, it added.
Orsted warned that the order could also damage its reputation, undermine investor confidence and impact its ability to raise external financing or maintain credit ratings.
On 3 September, the joint venture submitted a notice of intention to sue the federal government and the following day filed a complaint in the US District Court for the District of Columbia challenging the order as unlawful.
A motion for a preliminary injunction was lodged on 5 September with a decision expected within weeks, although Orsted said there was no guarantee of success and any appeal could be lengthy, costly and unpredictable.
The company added there is also a risk of further actions against its other US projects, which could have similar or worse consequences.
Orsted said Revolution Wind, LLC is complying with the stop work order while pursuing legal remedies and “aims to resolve the matter expeditiously” to progress construction toward the planned 2026 commissioning.