Trump's court setback may offer little respite for embattled offshore wind

Bellwether offshore wind stocks Orsted and Vestas initially surged in response to a US federal court ruling that struck down President Donald Trump’s freeze on offshore wind permitting, but gains were soon reversed as investors took stock of the ruling.

With Massachusetts one of 17 states pursuing a lawsuit against the order, Judge Patti B. Saris said the state plaintiffs had produced “ample evidence demonstrating that they face ongoing or imminent injuries due to the Wind Order”.

She criticised the federal government’s justification for forcing a radical departure from prior permitting practices and for failing to provide a timeline for the compulsory review of projects already engaged in permitting.

Orsted shares initially rose 4.4% to a four-month high on the Copenhagen bourse but retreated below their opening level by the end of Monday trading.

Wind turbine manufacturer Vestas also surged 3.7%, but tracked backwards by market close.

Concerns were expressed about whether the Trump administration will appeal the ruling and, even if it does not, whether federal agencies will simply sit on permitting procedures.

Judge Saris criticised the administration's stance in suspending the permitting procedures and for failing to offer any time limits for the mandated review process.

But she stressed that her judgment did not extend to requiring a particular outcome, such as actually issuing the permit approvals.

A conference hearing to discuss form of judgment and remaining case issues was scheduled for next week, then defendants will have 60 days to appeal.

Erica Fuller, senior counsel at the Conservation Law Foundation, described the ruling as a “victory for offshore wind but also the rule of law.”

But she added: “It is unclear what the Trump administration will do with this ruling. It is appealable. And the impact of it on any particular project is also determined by many factors but could become more clear after the status conference.”

The court ruling was welcomed in some quarters as legally significant, but experts soon pointed out that it does not immediately unlock approvals or end the political uncertainty that has persuaded some developers to scale back their US ambitions.

"The district court's ruling is further confirmation that federal entitlements and changes in how energy regulations are applied must adhere to established permitting and procedural processes,” said Allan T. Marks, a lawyer and strategic advisor in global project finance and renewable power.

“This is good news for all energy investors, not just for offshore wind.

“But the ruling will likely not result in any significant reopening of the US market to new offshore wind projects that are not already fully permitted, under construction, or in operation,” he added.

“Investor confidence for new projects depends on federal policies and substantive actions, which are unlikely to change soon, not just on another judicial setback for the administration's attempt at an across-the-board rejection of offshore wind in federal waters."