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By Yawen Chen
LONDON, Aug 26 (Reuters Breakingviews) – Add $12-billion Orsted (ORSTED.CO) to the list of companies swept up in U.S. President Donald Trump’s storm. A Washington agency late last week halted work on a nearly finished wind-power project. The big question for CEO Rasmus Errboe is what it all means for a separate and more nascent development tied to a planned $9-billion rights issue. The answer, unfortunately, is bad – and there is also little he can do about it.
The Bureau of Ocean Energy Management on Friday issued a so-called stop-work order, effectively freezing progress at the 80%-complete Revolution Wind project. The site, which the Danish group co-owns with BlackRock (BLK.N), is supposed to supply electricity to 350,000 homes in Rhode Island and Connecticut from next year. Shares in Orsted fell 16% on Monday and rose slightly on Tuesday, wiping out 12% or about $2 billion of equity value.
Source: LSEG | Y. Chen | August 26, 2025
It may just be a temporary hiccup. Norwegian peer Equinor’s Empire Wind 1 project suffered a similar stop-work order in April when it was only 30% built, and saw the freeze lifted a month later. Since Orsted’s Revolution site is much closer to fruition, it might in theory be a stronger candidate for a restart.
Yet Equinor’s freeze came on environmental grounds. Orsted, however, seems tangled in a fuzzier national security net, judging from the regulatory letter. Errboe may fancy his chances in court given the unclear basis of the order, but a legal fight might risk straining ties with Washington further. An added complication is that Orsted is majority owned by the Danish government, which has clashed with Trump over the president’s quest for greater sway over Greenland.
The possibility of a long political standoff augurs poorly for a different Orsted wind project near New York, called Sunrise Wind. It is just 35% built, with $2.6 billion already sunk and another $6.2 billion still required. Orsted had planned to get help with the funding by selling equity stakes, but the Trump administration’s apparent hostility to wind power spooked potential partners and rendered this so-called “farm down” process impossible. Errboe must now ask his own shareholders to finance the build directly with a planned cash call, which will also help to shore up the firm’s balance sheet.
Given heightened uncertainty over such stop-work orders – one that might hit Sunrise directly at some point – the obvious thing to do would be to scrap Sunrise, rather than risk throwing good money after bad. Yet a person familiar with the company’s thinking told Breakingviews that cancellation fees would be almost as large as the bill from ploughing on. Given the sunk costs and limited upside from backtracking, it’s understandable that Errboe is sticking with the plan. Assume the proposed rights issue wins the shareholder vote next week, it therefore falls to his bankers, at Morgan Stanley (MS.N) and elsewhere, to pull it off – which is equivalent to about three-quarters of the company’s market capitalisation. At least the Danish state is willing to cough up, reducing the risk for Orsted and its underwriters. Errboe will push on – not necessarily out of conviction, but because he can’t afford not to.
Editing by Liam Proud; Production by Streisand Neto
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