Posted on February 25, 2025
During his campaign, Trump promised to “end” offshore wind projects “on day one,” and after taking office, he quickly issued an executive order to suspend federal permits and leases for both onshore and offshore wind projects.
This not only affected onshore wind but also dealt a heavy blow to the nascent offshore wind development. According to a report by The Wall Street Journal on the 23rd, developers have been postponing projects and writing down investments as a result.
For example, TotalEnergies has shelved its offshore wind development plan for four years; Shell has recorded a $1 billion impairment, more than half of which is related to offshore wind projects; Orsted has recorded a $1.7 billion impairment for its U.S. offshore wind business and has cut its capital investment plan for 2030 by a quarter.
Policy Changes: The “Emergency Brake” on the Wind Industry
Trump expressed strong opposition to wind projects, especially offshore wind projects, during his campaign. He explicitly stated in his inaugural address:
“We will not do wind power.”
Most onshore wind projects typically face difficulties in obtaining permits and multiple obstacles. Developers need to obtain permits from the Army Corps of Engineers, negotiate with the U.S. Fish and Wildlife Service, which may require its permits, and sometimes the Bureau of Land Management grants rights of way for grid interconnections, while the Federal Aviation Administration also needs to be informed about tower locations.
In addition to the permitting challenges, the industry also faces the risk that the tax credits included in the 2022 Inflation Reduction Act may be reduced. Trump has referred to this act as a “scam.”
Trump’s executive order specifically mentioned the Lava Ridge wind project in Idaho, calling for a suspension and review. Senator Jim Risch stated that he had pushed for the suspension of Lava Ridge in discussions with Trump a week prior:
“The tide is turning away from the multi-trillion-dollar ‘New Green Deal’ and DEI, moving in a different direction.”
To address potential changes in tax policy, developers accelerated project advancements from the election until December 31, including ordering equipment or starting work on-site, to ensure that even if projects are completed under different tax regimes, they can still receive existing tax credits.
Before the policies of the Trump administration were implemented, offshore wind projects were already facing multiple challenges, including global supply chain constraints, rising interest rates, and inflationary pressures, leading to significant increases in project construction costs. Some developers have had to renegotiate financing agreements.
Despite the challenges, the industry still hopes to continue its development. According to the American Clean Power Association, as of the end of the third quarter of 2023, there are still about 4 gigawatts of offshore wind projects under construction on the East Coast. Frank Macchiarola of American Clean Power stated that the industry organization hopes to ensure that projects under construction and in later development stages can continue.
The offshore wind supply chain extends to places like Louisiana, where 38 companies have signed supply contracts, including shipbuilding and vessel support. Otto Candies III, CEO of Louisiana-based marine transportation company Otto Candies, stated that the company views offshore wind as a way to diversify its customer base I hope the offshore wind power industry can continue to develop.
