Offshore wind stocks slide after U.S. pauses projects

The U.S. government has ordered a pause on leases for five offshore wind projects under development along the East Coast, dealing another setback to an industry that has faced mounting pressure from the Trump administration.

The Interior Department said Monday that the suspension is driven by national security considerations, warning that large offshore turbines could interfere with military and aviation radar systems. Officials said the pause will allow federal agencies to work with developers and state authorities to address any potential security risks.

The decision weighed heavily on the sector in financial markets. Shares of offshore wind developers and suppliers fell sharply, with Denmark’s Orsted (DNNGY) (DOGEF), a partner on the Revolution Wind project off Rhode Island, dropping 13%. Turbine maker Vestas (VWDRY) (VWSYF) and Dominion Energy (D), which is building the Coastal Virginia Offshore Wind project, each slid nearly 6%.

The move adds to a series of challenges for the U.S. offshore wind industry since President Donald Trump returned to office. Trump has repeatedly criticized offshore wind and moved quickly to restrict new developments, prompting legal challenges. Earlier this month, a federal judge struck down one of those restrictions as unlawful.

Whether national security arguments will prove a more durable basis for halting projects remains unclear. Radar interference from offshore turbines has been studied for years, said Raymond James analyst Pavel Molchanov, who questioned whether the administration has uncovered new information justifying such sweeping action. Jefferies analysts, however, said the wording of the suspension leaves room for projects to resume relatively quickly.

Concerns about radar disruption are not new. Previous administrations, including that of former President Joe Biden, modified offshore wind leases to address Defense Department objections, particularly along the West Coast.

Interior Secretary Doug Burgum said the size and movement of turbine towers and blades can create radar “clutter,” a view echoed in the department’s statement. The affected projects include Vineyard Wind 1 off Massachusetts, Revolution Wind near Rhode Island, Coastal Virginia, and New York’s Empire Wind 1 and Sunrise Wind.

Dominion Energy said it received an order to halt work on its project for 90 days, warning that prolonged delays could threaten power supply for critical military, technology and civilian infrastructure.