Equinor halts work on offshore wind project after US order

OSLO (Reuters) -Norway's Equinor will halt offshore construction of its Empire Wind I project in New York State, following a stop-work order from U.S. Interior Secretary Doug Burgum, the company said on Thursday.

The sudden order marks a major blow for the company and the nascent U.S. offshore wind industry, which previously enjoyed substantial support as part of former President Joe Biden's plan to decarbonise the power grid and combat climate change.

Equinor said in a statement it had taken immediate steps to suspend relevant marine activities, and was considering its legal remedies, including appealing the order.

Norway's majority state-owned energy company, which also produces oil and gas in the United States, said it was engaging with the U.S. administration to understand why it was ordered to stop work.

It won a federal lease for the project's site off the Atlantic coast under the previous administration of President Donald Trump in 2017.

Trump, however, ordered on his first day back in office in January a review of offshore wind permitting and leasing, though the fully-permitted projects had been seen as safe.

The decision to halt construction of Equinor's project sent shockwaves through the offshore wind industry.

The New York State Energy Research and Development Authority (NYSERDA) said the U.S. administration's decision to stop Equinor's project was fueled by "a shortsighted, political agenda."

"The irrefutable harm created by this action will send a chilling signal to any party investing in the U.S. market, all of whom rely on regulatory certainty," NYSERDA's head Doreen M. Harris said in a statement.

Germany's RWE had already cut investment in its U.S. offshore wind projects, including the approved Community Offshore Wind project in the New York Bight.

"In view of the current regulatory and political environment, we had reduced the scope of our further development activities to a minimum," RWE said in an email to Reuters.

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Empire Wind I's 810-megawatt capacity could generate enough electricity to power 500,000 homes a year and was expected to begin operating in 2027.

Equinor said it had already spent $2 billion on the project, which was approved by the Biden administration in 2023 and started construction last year, employing about 1,500 workers.

Empire Wind's book value was estimated at around $2.5 billion, including an onshore terminal, while the project has drawn around $1.5 billion under its term loan as of the end of March, it added in the statement.

The Norwegian company is also a significant investor in U.S. oil and gas production, with its U.S. output accounting for 341,000 barrels of oil equivalent per day in 2024.

Equinor said it had invested more than $60 billion in the United States to date, including in oil, gas and renewables.

SIF Holding, the Dutch builder of huge steel foundations for offshore wind turbines, said it would also take a significant hit from the decision to halt construction of the project.

SIF shares closed down 7.6% in Amsterdam.

Danish Vestas, which won an order in September from Equinor to supply 54 V236-15.0 MW turbines for the Empire Wind 1 project, declined to comment.

It was expected to start delivering the turbines in 2026.

(Reporting by Nerijus Adomaitis, additional reporting by Christoph Steitz in Frankfurt; Editing by Essi Lehto, Joe Bavier, Ed Osmond and Rod Nickel)