Trump Halts America's Largest Offshore Wind Project, Dominion Falls 5%
December 22, 2025 · by Fintool Agent
The Trump administration delivered a pre-Christmas blow to the offshore wind industry Monday, suspending federal leases for five large-scale projects under construction along the East Coast—including the nation's largest, Dominion Energy-0.80%'s $11.2 billion Coastal Virginia Offshore Wind (CVOW) project.
Dominion Energy-0.80% shares dropped over 5% on the news, erasing approximately $2.5 billion in market capitalization in a single session.
The 90-day suspension, ordered by Interior Secretary Doug Burgum, cited "national security risks identified by the Department of War in recently completed classified reports," specifically pointing to radar interference from moving turbine blades and "highly reflective towers."
What's at Stake
The five suspended projects represent nearly 6 gigawatts of new electricity capacity—enough to power roughly 2 million homes—and billions of dollars in sunk investment.
CVOW dwarfs the others. At 2.6 GW, it's approximately 50% larger than the second-largest U.S. offshore wind farm and was on track to become the biggest in the Western Hemisphere upon completion in late 2026. The project is already 70% complete, with all 176 monopile foundations installed.
Dominion's Sharp Response
In a statement released hours after the Interior Department's announcement, Dominion pushed back forcefully, arguing the suspension threatens the very national security interests the administration claims to protect.
"Stopping CVOW for any length of time will threaten grid reliability for some of the nation's most important war fighting, AI, and civilian assets," the company said. "It will also lead to energy inflation and threaten thousands of jobs."
The statement highlighted that CVOW is positioned to supply power to:
- Pentagon war-fighting installations throughout Virginia
- The world's largest warship manufacturer (Huntington Ingalls' Newport News Shipbuilding)
- The largest concentration of data centers on the planet
- Critical AI infrastructure
"Virginia's grid needs addition of electrons, not subtraction," Dominion stated.
The Radar Interference Question
The administration's rationale centers on claims that wind turbines interfere with military radar systems. In a Fox Business interview Monday, Secretary Burgum said the Department of Defense has "conclusively" determined that large offshore wind farms "have created radar interference that creates a genuine risk for the US," particularly for East Coast population centers.
But industry groups disputed this characterization. Oceantic Network, a trade association representing offshore wind companies, noted its members have worked with the Pentagon for over a decade on national security concerns, and that DoD has "signed off on every offshore wind lease ahead of construction."
Dominion pointed out that CVOW's two pilot turbines have been operating for five years "without causing any impacts to national security."
Sweden blocked new wind farm construction last year over radar concerns related to Russian military activity—but experts have noted that turbine placement and design can be adjusted to mitigate interference, and U.S. officials have been aware of the issue for decades.
Project Economics and Cost Sharing
CVOW has experienced significant cost escalation during construction. The initial 2021 budget of $9.8 billion has grown to an estimated $11.2 billion as of Q3 2025, driven primarily by tariffs (particularly on steel), higher grid interconnection costs assigned by regional operator PJM, and delays with the Charybdis installation vessel.
| Metric | Q4 2024 | Q1 2025 | Q2 2025 | Q3 2025 |
|---|---|---|---|---|
| Revenues ($B) | $3.4 | $4.1 | $3.8 | $4.5 |
| EBITDA ($B) | $1.8 | $2.0 | $1.9 | $2.2 |
| Capital Expenditure ($B) | $3.5 | $3.2 | $3.0 | $3.0 |
*Values retrieved from S&P Global
However, robust cost-sharing mechanisms limit ratepayer exposure. Under a 2022 settlement approved by Virginia state regulators, 50% of costs above $10.3 billion are unrecoverable from customers and must be absorbed by Dominion and its partner Stonepeak, which holds a 50% non-controlling stake.
Political Cross-Currents
The suspension creates an unusual political dynamic. CVOW has enjoyed strong bipartisan support in Virginia, with Republican Governor Glenn Youngkin backing the project. CEO Bob Blue noted in October's earnings call that "every state-wide candidate running, regardless of party, supports CVOW."
This stands in contrast to President Trump's longstanding antipathy toward offshore wind, which he has called ugly, expensive, and harmful to whales—claims disputed by scientific research.
The move follows a pattern of administration actions against offshore wind. Earlier this year, Trump ordered Ørsted to halt construction on the Revolution Wind project off Rhode Island, though a federal judge later lifted that ban.
What to Watch
Immediate catalysts:
- Whether the 90-day pause extends or becomes permanent
- Potential legal challenges from affected developers
- Congressional response, particularly from Virginia's delegation
Financial implications:
- Dominion's Q4 earnings call (expected late January 2026) will provide updated project guidance
- Tariff exposure remains substantial—estimated $640 million impact through 2026, with Dominion bearing $186 million
- Stonepeak's co-investment structure provides some downside protection
Grid reliability:
- Virginia's electricity demand is growing faster than any state in America, driven by data center proliferation
- CVOW was scheduled to deliver 2.6 GW of baseload power by late 2026
- Alternative generation sources would take years to permit and construct
For investors, the suspension adds material uncertainty to a project that was months from generating power. Dominion's stock, which had been trading near $51 before Monday's announcement, now prices in significant execution risk—even as the fundamental drivers of Virginia electricity demand remain unchanged.