Maritime Legal Update
– January 2026
US offshore wind:
courts halt enforcement of stop-work orders, but regulatory uncertainty chills
future investment
(prepared by Marek Czernis & Co. Law
Office)
Marek Czernis Law
Office & Co. | www.czernis.pl
1. Introduction
Between 16 and 18 January 2026, three US
federal judges issued rulings blocking the enforcement of federal stop-work
orders and allowing offshore wind construction to resume in New York, Rhode
Island and Virginia. While these decisions represent short-term setbacks for
the Trump administration’s campaign against offshore wind, they do not resolve
the underlying legal disputes on the merits.
At the same time, analysts warn that policy
volatility has already undermined investor confidence, effectively freezing the
pipeline for new offshore wind projects in the United States.
2. Procedural posture of the cases
- The court decisions are interim injunctions, not
final judgments;
- The legality of the 22 December 2025 stop-work
order remains to be decided;
- The administration has pledged to continue
defending the ban, citing undisclosed national security risks, including
alleged radar interference.
Notably, judges appointed by Trump, Reagan and
Biden have all rejected the government’s arguments at the interim stage.
3. National security
arguments under scrutiny
The US Department of the Interior argues that
new classified information from the Department of Defense raises concerns about
offshore wind in light of evolving “adversary technologies.”
So far, courts with access to the
underlying material have found the justification insufficient to warrant a
blanket halt of construction.
4. Economic and
investment impact
Despite construction resumptions, the risk
profile for US offshore wind has deteriorated sharply:
- Accelerated phase-out of federal tax credits,
requiring projects to commence work by mid-2026;
- Without subsidies, offshore wind costs in the US
are estimated at ~USD 199/MWh (BloombergNEF);
- BloombergNEF has slashed its 2040 capacity outlook
from ~46 GW to ~6.1 GW, largely limited to projects already under
construction.
As BloombergNEF analyst Atin Jain noted, courts
may halt abrupt enforcement, but they cannot restore a stable development
pipeline.
5. Project-level exposure
- Ørsted
– Revolution Wind: near completion; losses of USD 105m from the
first pause and USD 1.44m/day from the second;
- Ørsted – Sunrise Wind: separate legal challenge;
power for ~600,000 homes;
- Equinor
– Empire Wind: ~60% complete; avoided a potential USD 5.3bn loss
via injunction;
- Dominion
Energy – USD 11bn Virginia project; 176 turbines; construction restarting;
- Vineyard
Wind – 95% complete; new injunction sought to finish operations.
Developers have indicated they will pursue both
litigation and cooperation with federal authorities.
6. Legal and
contractual implications
- Stop-work orders as governmental
action triggering EOT and standby/demobilisation claims;
- Financing stress: covenant breaches, COD
delays, offtake renegotiations;
- Insurance coverage: DSU/ALOP
and regulatory shutdown risks;
- Evidence management: causation,
critical path and daily loss quantification;
- Systemic risk: even successful
injunctions do not de-risk future projects.
7. Conclusion
While recent court rulings permit several US
offshore wind projects to proceed, the broader policy shift has already had a
chilling effect on new investment. Regulatory uncertainty, potential
permit reversals and reduced subsidies have fundamentally altered the risk
calculus.
In the assessment of Marek Czernis & Co. Law
Office, the coming months will hinge on final court decisions, the completion
of projects already underway, and the robustness of contractual and financial
protections against sudden administrative intervention.