Some observers are criticizing the decline of the US offshore wind industry, pointing to changes in federal policies during Donald Trump’s second presidency. However, the reality is quite complex, and the recent difficulties faced by Danish developer Orsted in the US exemplify larger issues affecting the industry as a whole.
Orsted made headlines again on Monday due to a setback related to its Revolutionary Wind Project off the coast of Rhode Island. The U.S. Department of the Interior issued an order aimed at “protecting national security interests” and preventing disruption of economic zones and high seas. This marks the second significant blow to Orsted’s ambitions in recent weeks.
As analysts from Sidbank noted, the situation poses substantial challenges for securing funding. One analyst mentioned that, after 20 years in equity analysis, this situation is unlike anything else he has witnessed. This highlights the pressure Orsted is under. Interestingly, while much of the blame points to Trump’s policy changes, Orsted’s issues are likely to linger for years.
For instance, in 2023, before the election, Orsted announced it would be abandoning two wind projects off the New Jersey coast, coinciding with the Biden administration’s push to accelerate offshore development. The abandonment resulted in a staggering over $4 billion write-down. Orsted’s then-CEO, Mads Nipper, indicated that the company set aside an additional $1.55 billion to cover potential cancellation fees, totaling a massive $5.55 billion.
In February 2024, BP faced challenges with a long-term offshore wind venture, reporting a $1.1 billion loss related to its US projects. They decided to sell their stakes in two projects, Empire Wind 1 and 2, managed by the Norwegian company Equinor, while also suspending a third project off Massachusetts, known as Beacon Wind. Equinor, meanwhile, struggled to continue the Empire Wind Project, incurring a $955 million loss after a similar halt from the Department of the Interior.
Shell, another major British oil company, pulled out of the Atlantic Shores project off New Jersey, indicating serious setbacks in the market. Just two months after making a significant announcement in late 2024, they confirmed they would no longer lead new wind project developments.
While critics often direct their frustrations at Trump, many of the issues occurring now are not easily assignable to him. A Shell announcement in March 2024 cited general market conditions—including inflation during Biden’s presidency and supply chain challenges—as reasons for exiting the Massachusetts Sea Wind Project.
It’s clear that Trump’s policies have significantly affected the US offshore wind landscape; however, attributing the industry’s struggles solely to him is an oversimplification.
The ISO-NEW England Grid Manager responded to the Department of Interior’s Stop Work Order with a somber statement, suggesting that these administrative actions could jeopardize grid reliability amid rising demand. Nevertheless, attributing these reliability problems solely to Trump ignores a history of poor policy decisions that have plagued the New England grid for the past two decades.
Trump has certainly made an impact, but the challenges within the American offshore wind industry existed long before his second term. A more nuanced understanding is necessary to address these ongoing concerns.
