Donald Trump’s decision to halt offshore wind development permits has dealt a devastating blow to the already struggling US offshore wind sector, which was grappling with high costs and economic uncertainties even before his re-election. Industry experts warn that more than 90% of planned offshore wind projects—totaling over 60 gigawatts—are now at serious risk, threatening both the country’s energy supply and its decarbonization goals.
Unlike other renewable energy sources, the offshore wind industry in the US is heavily reliant on federal permits, making it particularly vulnerable to policy shifts. Trump’s executive order to pause leases and review previously approved projects has sent shockwaves through the sector. Vineyard Offshore, a major US developer backed by Copenhagen Infrastructure Partners, recently laid off 50 employees due to “market uncertainties,” while energy giants like Shell and TotalEnergies have pulled out of American offshore wind projects altogether, citing poor economic viability under the new administration.
The offshore wind industry has faced mounting financial pressures over the past two years due to high interest rates and inflation, causing many developers to cancel or renegotiate contracts. Ørsted, the world’s largest wind developer, described its US projects as the “most painful” part of its portfolio in 2023. Trump’s stance has further dampened investor confidence, with over $40 billion already poured into the sector. European companies, which back more than half of the US’s advanced offshore wind projects, are now reconsidering their involvement.
The implications of Trump’s decision go beyond the wind industry itself. Experts warn that halting offshore wind development could jeopardize energy stability, particularly along the East Coast, where land for alternative energy projects is limited and demand is surging due to artificial intelligence data centers, electric vehicle charging networks, and manufacturing growth. Robert Blue, CEO of Dominion Energy, which is constructing the country’s largest offshore wind farm, warned that stopping development “would be the most inflationary action” for Virginia’s energy sector.
Despite government subsidies, offshore wind remains one of the most expensive energy sources in the US, costing between $74 and $139 per megawatt-hour, compared to $45 to $108 per megawatt-hour for natural gas. Many executives argue that economic factors, rather than policy changes, are the primary reason for scaling back offshore wind plans. Duke Energy’s CFO, Brian Savoy, stated that the company has made little progress on a 2022 offshore lease in North Carolina, emphasizing that “economics are first and foremost” in decision-making. Similarly, Patricia Poppe, CEO of Pacific Gas and Electric, dismissed offshore wind as too costly compared to other energy sources.
Even turbine manufacturers like GE Vernova have been hesitant to pursue new offshore wind projects. CEO Scott Strazik stated that Trump’s decision “doesn’t change growth expectations” because the company had already stopped taking new offshore wind orders due to unappealing financial returns.
Trump’s policies have reinforced skepticism about the long-term viability of offshore wind in the US. While other renewable energy sectors continue to grow, the offshore wind industry appears to be on the brink of collapse, as developers, utilities, and manufacturers shift their focus to more economically sustainable alternatives.
