The U.S. offshore wind industry—already bruised by rising costs, policy uncertainty, and financing challenges—was hit with another shock this week. The Trump administration announced the immediate suspension of leases for five major offshore wind projects along the East Coast, citing national security risks tied to military radar interference. The move sent offshore wind stocks tumbling and reignited political tensions between Washington and coastal states betting heavily on clean energy development.
A Sudden Freeze on Five Flagship Projects
The U.S. Department of the Interior said Monday that leases for five large-scale offshore wind farms are now on hold pending a federal review. The projects affected include:
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Ørsted’s Revolution Wind
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Ørsted’s Sunrise Wind
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Avangrid and CIP’s Vineyard Wind 1
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Dominion Energy’s Coastal Virginia Offshore Wind
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Equinor’s Empire Wind 1
According to the Interior Department, the suspension was triggered by a complaint from the Pentagon. Defense officials warned that the movement of massive turbine blades and the reflective surfaces of offshore towers could interfere with military radar systems—potentially affecting the detection and tracking of threats along the East Coast.
Interior Secretary Doug Burgum said the federal government’s "first responsibility is national security," and the pause is meant to ensure that offshore wind development does not compromise military readiness.
States Push Back: "No Credible Justification"
The announcement immediately drew backlash from state leaders. New York Governor Kathy Hochul and Connecticut Attorney General William Tong said they are evaluating legal and policy responses, arguing that the suspension lacks a factual basis.
Hochul accused the administration of "suppressing clean energy and high-paying jobs under any pretext," while Connecticut officials said the decision undermines years of planning and billions in investment.
Industry groups echoed those concerns. The National Offshore Industry Association (NOIA) noted that the Pentagon has participated in project reviews for years and had not previously objected. NOIA President Erik Milito urged the administration to lift the freeze, emphasizing that all five projects had already cleared federal defense reviews.
Market Reaction: Offshore Wind Stocks Slide
The market wasted no time reacting. Shares of Ørsted plunged more than 12% on Monday, while Dominion Energy (D-US) and Equinor (EQNR-US) also posted losses. Investors fear that the suspension could delay construction timelines, jeopardize financing, and increase project costs.
Dominion Energy issued one of the strongest warnings. The company said the freeze could threaten the stability of Virginia’s power grid, which relies on the Coastal Virginia Offshore Wind project to meet rising electricity demand—including from AI data centers, military installations, and shipyards building nuclear-powered vessels.
The statement underscored a growing tension: offshore wind is increasingly tied to national energy security and digital infrastructure, yet it is now being challenged on national security grounds.
A Pattern of Hardline Policy
The suspension is the latest in a series of aggressive actions by the Trump administration targeting offshore wind. Earlier this year:
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Ørsted was ordered to halt construction on Revolution Wind, though a federal judge later lifted the injunction.
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Equinor’s Empire Wind project was temporarily blocked until New York agreed to advance natural gas pipeline projects favored by the administration.
During his campaign, Trump repeatedly vowed to end the U.S. offshore wind industry, calling turbines "expensive, inefficient, and harmful to wildlife," while promoting oil and gas development. The administration has also raised concerns about offshore wind facilities being vulnerable to drone swarm attacks, adding another layer of national security rhetoric to the debate.
The policy uncertainty has already had financial consequences. Ørsted raised $9.4 billion earlier this year to shore up its U.S. operations after potential partners hesitated amid shifting federal policy.
Why Radar Interference Matters
The Pentagon’s concerns center on how offshore turbines may affect radar systems used for:
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Maritime surveillance
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Aircraft tracking
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Threat detection along the East Coast
Large turbine blades can create "clutter" on radar screens, while reflective towers can distort signals. Although developers have historically worked with the Department of Defense to mitigate these issues, the Trump administration appears to be taking a more rigid stance.
Industry experts note that radar interference is not a new issue—European offshore wind farms have operated near military zones for years—but the U.S. review process has become increasingly politicized.
What the Freeze Means for Investors
For investors, the suspension raises several red flags:
1. Project Delays and Cost Inflation
Offshore wind projects already face rising costs due to supply chain constraints, higher interest rates, and inflation. A federal freeze adds another layer of uncertainty.
2. Regulatory and Political Risk
The administration’s willingness to halt projects—even those previously approved—signals elevated political risk for the sector.
3. Grid Reliability Concerns
Utilities like Dominion warn that delays could affect grid planning, especially as AI data centers and electrification drive up demand.
4. Financing Challenges
Developers may face higher borrowing costs or difficulty securing partners if policy instability persists.
Looking Ahead: A Turbulent Path to 2026
The offshore wind industry was already struggling to regain momentum after a wave of cancellations and renegotiations in 2023–2024. The latest suspension could further slow the sector’s recovery, especially if legal battles drag into 2026.
Still, state governments remain committed to offshore wind as a cornerstone of their clean energy strategies. New York, New Jersey, Massachusetts, and Virginia have collectively set multi-gigawatt targets that cannot be met without large-scale offshore projects.
Whether those ambitions can survive federal pushback remains an open question.
Conclusion: A Sector Caught Between Two Imperatives
The Trump administration’s decision to freeze offshore wind leases highlights a fundamental clash between clean energy expansion and national security priorities. For developers and investors, the stakes are high: billions in capital, long-term grid planning, and the future of East Coast energy strategy all hang in the balance.
As the political and regulatory landscape shifts, offshore wind stocks may remain volatile. For now, the sector finds itself navigating a storm—one driven not by weather, but by Washington.