As Developers Pull the Plug on Major Offshore Wind Projects, Biden's Big Plan Has Turned Into a Disaster
President Joe Biden’s offshore wind goals are looking increasingly unrealistic to achieve, with more capacity canceled or postponed than is operational or pending, according to a data analysis from an industry expert.
The Biden administration has unleashed billions of taxpayer dollars to subsidize the industry in pursuit of its 2030 goal for offshore wind, which envisions offshore wind providing enough electricity to power 10 million American homes at the turn of the decade. However, more offshore wind capacity has been cancelled or postponed than is online or pending, according to data analysis conducted by Ed O’Donnell, a former nuclear engineer who is now a principal at a New Jersey consultancy called Whitestrand Consulting.
“There’s no economic rationale for offshore wind as a market-based supplier of power. There are a lot of issues with it, but it won’t survive,” O’Donnell told the Daily Caller News Foundation. “It’s only surviving through subsidies in the form of massive federal tax credits and offshore rate subsidies from the different states and their ratepayers. So, this is why they’re struggling, because those things have economic consequences, and there’s a limit to how much of this can be passed on to taxpayers and ratepayers.”
America’s Largest Native American Lobbying Group Calls For Biden Admin To Hit Pause Button On Offshore Wind https://t.co/4jZx3L1PAc
— Daily Caller (@DailyCaller) February 24, 2023
Specifically, O’Donnell calculated that about 15.5 GW of the 35.7 GW of announced offshore wind capacity has since been cancelled or postponed, compared to about 5.2 GW of capacity that he expects to come online by 2030. A further 4.7 GW of capacity are awaiting final investment decisions from developers, and O’Donnell considers New York’s 810 MW Empire Wind 1 project as the only development in that category that has the potential to come online by 2030, he told the DCNF.
The industry has been plagued by the high inflation, high interest rate environment that has defined much of Biden’s first term. Profit margins that looked lucrative years ago have been eroded by huge upswings in the cost of raw materials needed to construct offshore wind turbines, and higher interest rates have made refinancing a less viable option for developers whose projects are on the ropes.
Additionally, logistical problems with vessels and the Jones Act have also delayed schedules and driven up developers’ costs. Transmission infrastructure will also be needed to actually transmit power from the source of generation to customers, posing another challenge for developers and regulators: permitting and building that infrastructure figures to be a costly and time-consuming process, and pockets of fierce local opposition to offshore wind along the East Coast or in the path of transmission lines could also cause headaches for offshore wind’s proponents, O’Donnell told the DCNF.
Developers pulled the plug on several major projects in 2023, and 2024 has continued to be tough for the industry: Cancellations or delays have hit projects in states like New York and Maryland. Notably, a 2023 lease auction in the Gulf of Mexico flopped. Nevertheless, the Biden administration is forging ahead with an ambitious offshore leasing schedule looking to bring offshore wind to the Gulf of Mexico and the West Coast.
The Biden administration’s 2030 goal of 30 GW now appears to be firmly out of reach, and the American Clean Power Association recently released a report projecting that there will be about 14 GW of capacity online by 2030, with the 30 GW goal not being met until 2033 at the earliest.
O’Donnell, however, is less sanguine about the industry’s prospects of reaching 30 GW, despite its receipt of billions of dollars of government subsidies. Notably, former President Donald Trump has pledged to roll out a “day one” executive order targeting the offshore wind industry if he returns to the White House in January 2025.
“I see no hope for getting anywhere near 30,000 megawatts by 2030, or maybe ever,” O’Donnell told the DCNF. He added that he expects to see more developers cancel, postpone or take major impairments on their projects in the coming months.
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