The offshore wind industry of America is facing the darkest days as the European energy giants are bleeding billions of dollars due to Trump his aggressive anti-wind policies. Projects once touted as the great hope are abandoned, huge developers have departed the market, and complete supply chains are collapsing. The renewable energy of the Northeast is on the line as political battling exercises threaten to ruin a market that has managed to begin numerous a long time ago.
Trump’s administration dealt a deadly blow to wind development
The move back to the White House by President Trump has seen the offshore wind industry enter into new levels of turmoil, as his executive order in January froze all such governmental actions on wind-based energy until a review of the sector can be undertaken. This move has resulted in what the industry experts termed as a tremendous chilling effect, whereby there is a high level of uncertainty, hence giving the sector serious challenges and retrogressive tendencies.
Its unfriendliness goes beyond putting in place regulatory freezes to threats of abolishing much-needed tax credits that are used by developers to finance the projects. Trump has repeatedly labeled turbines as horrible and lied and said they cause cancer, and has also claimed without scientific evidence that offshore wind farms are killing whales.
Large European players are abandoning the U.S. market after incurring huge losses. Danish Ørsted estimates that it requires nine billion dollars to finish the U.S projects it started, but cannot due to the policies of the Trump administration. The company attributes the failure to adverse developments, including unexpected developments beyond its control.
Industry giants are buried in financial carnage
The cost of the financial carnage is enormous, with European energy companies swallowing billions of dollars worth of losses on their American projects. Shell has abandoned its Atlantic Shores project in New Jersey in a $996 million loss, and Norway’s Equinor recorded a 955 million impairment related to delays to its Empire Wind project that Trump illegally tried to cancel.
Ørsted’s woes go further than the present political pressures, as it has thus far recorded more than $5 billion of impairment charges due to the cancellation of planned Ocean Wind offshore wind developments off the coast of New Jersey. The political hostility that the offshore wind sector and its developers have and are struggling to overcome, which includes the company not being able to attract buyers of ownership interests in its Sunrise Wind project, is not limited to wind energy.
How market uncertainty destroys investment confidence
Elizabeth Wilson, a professor of wind power at Dartmouth College, gave a succinct account of the situation: “Should read, come to America and lose a billion dollars.” This is because of the combination of all-permitted political risk, regulation uncertainties, and anti-federal policies that have been completely off- limits, on U.S. offshore wind investments to international developers.
The flood of bankruptcies in the offshore wind industry is a source of concern to several Northeast states (and many further afield such as India), which have invested so heavily in offshore wind infrastructure. The city of New London, Connecticut, which had been reborn through the offshore wind industry, is now in the dreadful position of having projects stall and supply chains break up.
The U.S. offshore wind industry is currently at a crossroads where it can either cease to exist or survive due to political warfare in the Trump era. As the European energy giants bail out of American markets as a result of financial losses never realized before, the northeast states see their renewable energy plans turn into mud. Flying in the face of this reality, America will lose its window of opportunity to develop offshore wind, an asset that will quickly be absorbed by more receptive global rivals.