EnergyOMNI's Perspectives I Trump's Offshore Wind Turmoil

Edited by EnergyOMNI

U.S. President Donald Trump was sworn in for his second term on January 20 and immediately reversed many of the Biden administration's policies, with renewable energy and climate policy among the first to be affected. The offshore wind industry has become a particular focus. On January 20, the White House issued a memorandum announcing "Temporary Withdrawal of All Areas on the Outer Continental Shelf from Offshore Wind Leasing and Review of the Federal Government's Leasing and Permitting Practices for Wind Projects." Offshore wind projects that had already obtained seabed leases were also ordered to halt construction and undergo renewed review.

As a result of this series of policy shifts, many offshore wind projects in the U.S. that were under development or construction this year have had their permits revoked or been forced to suspend work pending review.

List of offshore wind projects affected

In addition to the above mentioned projects, the Secretary of Interior Department said it is "taking a deep look" at other under-construction offshore wind farms: Vineyard Wind 1(806MW), Coastal Virginia Offshore Wind(2.6GW), and Sunrise Wind (924MW). In total, the nine wind projects were set to deliver around 12.5GW of installed capacity, enough to provide power to almost 5 million households. More than 9,000 direct and indirect jobs flowing from the projects are also at risk should they be halted, according to an analysis.

The case of the Revolution Wind project sparked widespread controversy when, with nearly 80% of construction completed, the Trump administration ordered a suspension of work citing "national security interests," without providing further explanation. The developer, Ørsted, saw its stock price plunge amid the disruption, facing not only project delays but also potential risks of contract renegotiations and breaches with suppliers. Ørsted subsequently filed a lawsuit, and in September, the court ruled that construction could resume while the case proceeds. Rhode Island Governor Dan McKee immediately stated, "At a time when we should be moving forward with solutions for energy, jobs and affordability, the Trump Administration is choosing delay and disruption." adding that he and Connecticut Governor Ned Lamont would pursue very avenue to reverse the decision to halt work on Revolution Wind.

Trump's sharp policy reversal and his vow to "end" the offshore wind industry has effectively derailed the Biden administration's goal of installing 30 GW of offshore wind capacity by 2030. Given that several projects are already under construction, industry estimates suggest that around 16 GW of capacity could still be completed by 2030. However, some analysts project a more pessimistic outlook, saying the figure could fall to less than half that target (around 14 GW) — or even lower. The most conservative estimates warn that the U.S. may struggle to reach double digits, with only about 7 GW likely to come online by the end of the decade.

Federal agencies have also begun revising regulations to align with the Trump administration's policy direction. According to analysis by BloombergNEF, the One Big and Beautiful Bill significantly accelerated the expiration dates for renewable energy tax credits. Previously, offshore wind projects only needed to begin construction before 2033 to qualify for tax incentives. However, under the new rules, projects must now be operational by the end of 2027 or begin construction by July 4, 2026, to remain eligible. This change has been described as "the final nail in the coffin" for many approved but not-yet-initiated projects, effectively causing numerous developments to collapse before construction even began.

Federal government policies on offshore wind

Source：The New Bedford Light

Compared with fossil fuel power plants, offshore wind can rapidly supply energy and create jobs. The cancellation of these projects not only jeopardizes investments but also threatens the U.S. shipbuilding and steel supply chains, while potentially driving up electricity prices across the country. The New England grid operator has also warned of potential power shortfalls, if the targeted offshore wind projects are scrapped

It is unusual for the US government to attempt to shut down a project it has previously approved, even under a different administration. Such actions are expected to create a chilling effect across the entire energy industry.

The onslaught on wind power during Trump's second term has bewildered some conservatives who still adhere to "all of the above", a term widely used by Republicans, including the Trump administration in its first term, over the past decade to denote an agnostic, free-market approach to energy. Some conservative groups argue that they haven't heard an economic or national security reason for the harsh turn against offshore wind. "It sounds like it is personal."