With Hit On 810 MW Offshore Project, RE Hopes In US Get Rude Shock

While there was little doubt about the antipathy of the incoming Trump administration to renewable energy, built around unsubstantiated allegations without basis in science or data, it has taken a proper brake on a key project to wake up renewable energy sector to the risks they face now.

The project in question is an 810 MW offshore wind project being developed by Norwegian energy major Equinor off the coast of Long Island. The striking thing about the action here is that the project was ‘shovel ready’ with all permissions to start construction in place.

Thus, while President Trump, a longtime critic of wind energy, had issued a moratorium on new development of offshore wind projects on his re-entry into the White House, most people believed projects already approved would not face trouble. The lease for the Empire Wind project was in fact signed in 2017, during Trump’s previous run at the White House, while most of the subsequent permissions happened during the Biden administration.

The Bureau of Ocean Energy Management (BOEM), the key federal agency for permitting offshore wind projects, was asked to halt the project on grounds that “approval for the project was rushed through by the prior administration without sufficient analysis.” A claim that seems completely made up, to put it simply. Even allegations like risks to whales from offshore wind have been watered down after investigation, making one wonder just how this will be justified eventually.

A hit on Offshore wind energy hurts also because wind energy is the largest source of renewable energy for the US grid, making up about 10% of the U.S. electricity mix. The hit on Empire Wind 1 means other approved projects are also at risk, including celebrated ones like Vineyard Wind 1 project in Massachusetts and the Revolution Wind project in Rhode Island. Even before this, the tariffs on European Steel and Aluminium had also sent a signal that pricing projects was set to become much more challenging.

Ambitious plans announced as recently as last year planned to grow the offshore wind capacity of the U.S. significantly, with wind energy majors announcing plans confidently. Almost $65 billion  was expected to be invested in offshore wind by the end of the decade, which would support the creation of approximately 56,000 jobs. Of the 50 GW of wind energy currently under development across 37 leases, it is anybody’s guess how much will actually make it now, after the hit on Empire Wind. It seems safe to say that further hits will happen, unless better sense prevails at some stage.

Even solar developers are unhappy at the wide ranging tariffs slapped on imports, specifically from South East Asia, which will take up the cost of solar projects significantly. That is expected to have a chilling effect on fresh commitments, once existing inventory of panels is drawn down.

With renewable projects in the US taking anything anything between 2 years to 4 years between planning and launch, it is anyone’s guess what the impact of these moves would be by 2026-27 and beyond. For now, it seems increasingly likely that optimistic projections of business as usual need to be taken with a pinch of salt, at least for the remaining duration of the Trump presidency.