Energy firms have slowed construction of offshore wind farms in the U.S. for various reasons in recent years, including, most recently, opposition from U.S. President Donald Trump's administration.
Offshore wind was a key pillar of former President Joe Biden's promise that fighting climate change will create jobs and invigorate the economy. In 2023 and 2024, however, several offshore wind companies took billions in write-offs, impairments and other cancellation fees after determining they could no longer complete projects profitably due to rocketing construction costs, higher interest rates and supply chain snags.
After Trump suspended new offshore wind leasing on his first day back in the Oval Office in January, several energy analysts said they did not expect any new offshore wind projects other than those already under construction to move forward over the next few years.
There are four offshore wind farms in service and producing power in the U.S., and another four projects under construction that are expected to enter service from 2025-2027. There are also several projects in advanced development.
Recently, some analysts have warned that projects already under construction may not be safe from attacks by the Trump administration.
"With no new projects expected to be completed beyond those under construction (even those are at risk), the nascent industry is precariously positioned," analysts at U.S. investment bank Jefferies said in a note this week.
Jefferies pointed to a planned lease review for projects under construction by the U.S. Secretary of the Interior, and to the Trump administration's planned update on ongoing litigation on April 23 relating to Virginia-based energy firm Dominion Energy's offshore wind Biological Opinion (BO), a key environmental analysis.
Dominion is building the 2,587-megawatt Coastal Virginia Offshore Wind project off Virginia and expects the roughly $10.7 billion project to produce first power in late 2025.
In the Dominion lawsuit, some stakeholders have argued that the U.S. Bureau of Ocean Energy Management (BOEM) did not consider the cumulative impact on a species of whale from several offshore wind projects and that the risk of turbine failures was also not adequately considered.
"We are confident that this project is not going to have adverse impacts on marine life, including North Atlantic right whales. We look forward to filing our response with the court in early May," a spokesperson at Dominion told Reuters in an email.
In New York, a spokesperson for Community Offshore Wind said the company was waiting for a response from the New York State Energy Research and Development Authority (NYSERDA) on the state's fifth offshore wind solicitation in 2024.
Community Offshore, which is a joint venture between units of German energy company RWE and British energy company National Grid, said the construction timeline for the project was contingent on getting an Offshore Wind Renewable Energy Certificates (OREC) award from New York.
Officials at NYSERDA, which said on its website that it expected to execute contracts from the fifth solicitation during the first quarter of 2025, were not immediately available for comment.
In Massachusetts and Rhode Island, utilities negotiating contracts to buy power from offshore wind developers from a 2023 solicitation told state agencies this week that the date to execute those contracts was delayed from March 31 to June 30. That was just the latest of several contract delays for the 2023 solicitations, according to filings from Rhode Island power company Rhode Island Energy.
Rhode Island Energy is a unit of Pennsylvania energy company PPL.
SouthCoast Wind, which is seeking power purchase agreements with utilities in Rhode Island and Massachusetts, said "SouthCoast Wind continues to support the deadline extension for contract execution."
"The multi-state negotiations have been complex and ambitious; now they must also tackle uncertainty presented by federal policy," SouthCoast spokesperson Rebecca Ullman told Reuters in an email.
SouthCoast is being developed by the Ocean Winds joint venture between units of Portuguese energy firm EDP's EDP Renewables and French energy firm ENGIE.
(Reuters - Reporting by Scott DiSavino in New York and Nichola Groom in Los Angeles; Editing by Marguerita Choy)
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