Interior pauses five major offshore wind leases, markets tumble

The Interior Department suspended leases for five major offshore wind projects on December 22, effective immediately, after the Defense Department flagged potential national security risks. Officials said the pause is intended to allow an interagency review with the Pentagon, leaseholders and state authorities to assess whether identified risks can be mitigated, and whether continued construction or lease termination is warranted.

The action affects the five projects that were under construction in U.S. waters. They are Revolution Wind, a joint effort led by Ørsted with Skyborn Renewables located about 15 miles off Rhode Island; Sunrise Wind, an Ørsted project serving the New York area; Vineyard Wind 1, developed by Avangrid and Copenhagen Infrastructure Partners off Massachusetts; Coastal Virginia Offshore Wind, led by Dominion Energy off the Virginia coast; and Empire Wind 1, developed by Equinor for New York waters.

Government materials cite a Defense Department concern that turbine blades and towers could interfere with radar operations. Revolution Wind was reported to be roughly 80 percent complete at the time the pause was announced, with all offshore foundations in place and 45 of 65 turbines installed, and components staged at State Pier in New London, Connecticut as of a September 23, 2025 drone photo. Notices to halt work were being sent to developers and state level confirmations indicated some notices targeted leases for termination, even as federal officials emphasized the action was a temporary pause to allow further analysis.

Interior Secretary Doug Burgum framed the decision on social media, posting that the department was, “PAUSING leases for 5 expensive, unreliable, heavily subsidized offshore wind farms,” and attributing the action to national security concerns identified by the Defense Department. The announcement arrives against a political backdrop in which President Trump campaigned on a pledge to end federal support for offshore wind development, making the pause the latest significant disruption for the industry.

Financial markets reacted quickly. Shares of Ørsted fell more than 12 percent on the news, while Dominion Energy and Equinor shares traded lower. U.S. power related stocks posted broad declines with intraday moves that included NRG down about 4.5 percent, Constellation Energy down more than 6 percent, Talen Energy down nearly 3 percent, Vistra down about 2 percent, and GE Vernova down over 3.5 percent. The swift selloff reflects investor concern about construction stoppages, regulatory uncertainty, and potential write downs of sunk capital.

The pause raises immediate questions for grid planning and state decarbonization goals that relied on these projects for large blocks of clean capacity and transmission upgrades. The five projects together represented a material portion of the early U.S. offshore wind pipeline and involved billions of dollars of private investment and supply chain commitments. If the interagency review leads to mitigation measures that allow work to resume, the industry may face costly design changes and delays. If leases are ultimately revoked or terminated, policymakers will confront trade offs between national security priorities and climate commitments, and states may need to identify alternative sources of large scale offshore or onshore clean generation to meet near term emissions targets.