Orsted's Rhode Island Wind Farm Given Go-Ahead by Judge

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00:00Orsted shares surging this morning after a US judge ruled that Orsted's Revolution Wind Joint Venture,

00:06which I think is just off Rhode Island, can resume construction off Rhode Island.

00:10The offshore wind farm has been a subject of obviously considerable controversy with the Trump administration.

00:16The Trump administration stopping the work order, and that had a fairly dramatic effect on Orsted's share price,

00:23which is now bouncing a little bit. Will Mathis joins us now for more.

00:26So what did the judge say, and what happens next?

00:30So this is a lawsuit that Orsted brought against the US government to allow them to keep working,

00:36to overturn the stop work order. And what they asked was that while this case is pending,

00:41that they'd be allowed to resume work, because if they don't, they would incur devastating costs, really.

00:46And the judge yesterday ruled with them. He said, you know, while this is ongoing,

00:50you can resume work because, A, I think you're going to win, and B, the costs will be really

00:55devastating for you.

00:56Yeah, tell us a bit more about the costs of not working in this situation then, Will.

01:00Yeah, so we got a little insight last week because, you know, little detail,

01:05Orsted is raising 60 billion Danish kroner, over 9 billion US dollars,

01:10the biggest such capital raise for a European energy company over a decade.

01:14So they came out of the prospectus where they said that every week that they can't work,

01:18it's costing them about 25 million dollars. And not only that, but come end of September,

01:23there's going to be sort of a cliff edge in costs, where if they aren't allowed to resume working,

01:28that those costs are going to ramp up so much that it's possible that they would have to cancel

01:33the project outright, which would be...

01:34And is that because they've just already committed to spend the money, or, you know,

01:38these are not variable costs that just disappear if they don't work?

01:40It's because they have suppliers, they have contractors, particularly these really

01:45specialized ships, where there are only a handful of them in the world that can actually install

01:50offshore wind turbines, which are huge pieces of equipment, you know, bigger than this building

01:54that we're in now. And if you have a contract, there's a certain period where you have that ship

01:59available to you. And if they have this delay, then maybe they're going to need to open up that

02:03contract, get new ships, get new contracts at today's prices, rather than the prices of a few

02:07years ago.

02:08So the delay itself costly then, Will, but that green on the screen that we're seeing right now,

02:13does that signify that the winds have changed for the sector? Is this the start of a turnaround?

02:18Orsted would certainly hope so. If we were to zoom out on the chart of Orsted shares,

02:23it would still look pretty bad, because, you know, they have come out and said, you know,

02:27we need, you know, $9 billion to be able to keep executing on our business plan. But what they have

02:35said is that this money will allow us to turn a page, it will allow us to return to growth,

02:39deliver these projects, which are going to earn us a lot of money in the coming years.

02:43And if they can build, you know, it could be looking back some years from now that this

02:47will be seen as a turning point that they are able to start delivering on that promise.