After Trump | What are US offshore wind's prospects once he's gone?
IN DEPTH | Experts weigh in on the industry's future amid surging power demand and few alternatives, but also a political environment poisoned by the President's vitriol
US offshore wind insiders agree: President Donald Trump's war on the industry has stalled development, potentially robbing the nation of a promising source of giga-scale clean energy for years.
The 5.9GW currently in construction over five projects is almost certainly the only new capacity the nation will see by the time Trump leaves office in January 2029, a fraction of his predecessor Joe Biden’s 30GW vision.
Trump's 20 January Inauguration Day moratorium on offshore wind permitting and leasing scuttled projects that recently entered the regime.
The President's executive order also placed permitted projects under review with a goal of termination or amendment, stalling the remaining 13GW approved under Biden but not yet in construction. Billions of dollars in potential investment could be stranded.
But what are the industry’s prospects in a post-Trump world, assuming a friendlier, almost certainly Democratic, future administration?
Would the industry just pick up where it left off, wiping away the dust on moribund arrays for renewed activities? Or have Trump’s moves against the industry poisoned its prospects, revealing just how large US political risk really is?
Others, though, see strong potential for resurgence.
“The politics are so polarised that it is definitely a risk,” said Signe Sorensen, lead analyst for the Americas at Danish offshore wind intelligence firm Aegir Insights.
But this polarisation “may also be what kickstarts the sector again after Trump,” she added, with his successor and a future Congress potentially reinstating Biden-era tax incentives or other support.
Sorensen added: “If there is a good business case, then it will attract business.”
The business case
US offshore wind dates to President George W. Bush's administration but really kicked off under Biden, who envisioned a massive industry generating billions of dollars in investment and tens of thousands of union jobs.
Since then, the business case for delivering gigawatts of offshore wind power to the grid has only grown stronger on surging demand and the sheer vastness of the resource.
“The value proposition for offshore wind in the US is still very much there,” said BloombergNEF offshore wind analyst Harrison Sholler.
The National Renewable Energy Laboratory (NREL) estimates 1.47TW of fixed bottom and 2.77TW floating offshore wind potential ready to be tapped off the US East Coast.
The US race to dominate data centres and manufacturing, meanwhile, is underway on the East Coast, rocketing power demand.
MidAtlantic grid operator PJM anticipates nearly 5% demand growth every year to 2035 across its 13-state service territory that includes Virginia, New Jersey, and Maryland, all three at the fore of sector development.
Power demand is slower in New York and the New England region, hovering around 1% annually, but poor economics and policy hostility are driving fossil fuel power plant closures and firing up demand.
These tightly packed states meanwhile mandate some of the nation’s most ambitious emissions reduction targets without having the geography for huge amounts of onshore wind and solar.
For many states in the MidAtlantic and Northeast, offshore wind is a “crucial source” of clean energy, he said, “really, the only source that they are able to build in bulk to be able to meet [decarbonisation] goals.”
“If we start seeing blackouts in 2027 or 2028 because the government hasn’t allowed wind/solar development, and gas will not come online fast enough, there will be a critical need for power and an opportunity for states to demand that offshore wind gets built,” said Philip Totaro, CEO of research consultancy IntelStor.
Power shortages and surging prices could even push bipartisan support by shifting “sentiment towards building out offshore wind at scale,” said Alexander Fløtre, senior vice president and head of offshore wind for Norwegian energy consultancy Rystad.
This would “remove the risk of pendulum swings on offshore wind policy in the US, and provide the long-term stability that investors would need.” However, in the nation's current political climate, Fløtre conceded, “this is probably a less likely scenario.”
The industry would then always run the risk of major policy shifts every four years.
Political risk
The New York Bight offers a cautionary lesson.
With the federal regime taking around six years, if Trump is replaced by a friendlier administration, these projects would still run substantial political risk.
The industry needs “a framework that supports an acceleration of the projects’ progression within this four-year period,” said Fløtre.
BNEF's Sholler said however, “it's tough to see permitting timelines shortened so much that they don't straddle multiple administrations,” barring a two consecutive term future presidency.
Costs and tax credits
US offshore wind was struggling long before Trump returned to office despite Biden’s support as inflation, interest rates and supply chain bottlenecks sent costs spiralling.
NREL’s estimates for US offshore wind's levelised cost of energy (LCOE) rose from $84/MWh in 2022 to $117/MWh in 2024.
Rising costs make investment tax credits (ITC) even more vital for projects to go forward.
Sholler goes one further, noting that because states will be unable to subsidise development on their own, “BNEF sees the only real way that the US offshore wind industry will bounce back is if tax credits come back in some way, shape or form.”
Although the Big Beautiful Bill (BBB) curtails ITC for wind projects, those already in construction have access to the original tax credit regime under the Biden-backed Inflation Reduction Act.
These include Dominion Energy’s 2.6GW Coastal Virginia Offshore Wind (CVOW) to Virginia; Equinor’s 810MW Empire Wind 1 to New York; Iberdrola-Copenhagen Infrastructure Partners’ 800MW Vineyard Wind to Massachusetts; Orsted’s 704MW Revolution split between Connecticut and Rhode Island; and its 920MW Sunrise to New York.
Orsted's 132MW South Fork is already commercially operating and feeding New York's grid.
As the President has already blocked leasing and permitting, however, all other projects will be unable to access tax credits unless the rules are revised.
Looming power demand may offer offshore wind developers “leverage to demand these incentives be put back in place in order for the industry to have any future,” said Totaro.
Tax credit access isn’t the only challenge a future sector would face.
“Persistent high interest rates also still continue to hold back investment in renewables,” Totaro said.
He forecasts interest rates decline by 2029. This coupled with the expected high PPA prices, could result in an "explosion of interest in offshore wind development come 2030,” Totaro added.
US supply chain
Under Biden, offshore wind sparked a 40-state, $25bn+ investment in supply chain, according to industry group Oceantic Network, but the current status of much of this remains murky.
As US maritime law demands domestic vessels in coastal operations, these ships could see a lot of work in a future industry ramp.
Port upgrades continue, especially Equinor’s nearly $1bn renovation of South Brooklyn Marine Terminal and New Jersey’s similarly costly Wind Port in Salem County.
Other investments have however either fallen away, such as EEW’s monopile maker in New Jersey; or never happened, like Prysmian’s cable plant in Massachusetts.
“When activity comes back to the US and developers start doing things again, they're still going to be relying on a European-centric supply chain,” said John Murray, senior research analyst for S&P Global Commodity Insights.
European manufacturing capacity may be another challenge, as it will need to supply not just a revived US sector, but a burgeoning worldwide industry forecasted by the Global Wind Energy Council to see annual growth of 28%.
Ongoing capacity expansions by European suppliers and turbine OEMs amid current Continental industry headwinds, however, could mitigate future bottlenecks, Murray noted.
Still, the US would need a domestic supply chain “to reach the necessary scale to cut costs and operate efficiently, but this build-up is unlikely to happen without visibility on long-term, stable activity levels,” said Rystad’s Fløtre.
Global costs of offshore wind are projected to decline over time. NREL sees LCOE plunging to $63/MWh by 2030, while BNEF is more cautious at $67/MWh by 2035.
Yet, “there is no guarantee that the market fundamentals will improve or be favorable” following the Trump presidency, warned Fløtre.
“With inherently higher uncertainty in the US market, companies will likely require a higher rate of return, which will require significant improvements in these market fundamentals for developers to be able to reach a final investment decision,” he said.
If 'improved market fundamentals' translates into higher power prices, though, the industry might see significant pushback.
Ready for the ramp
Amid these myriad uncertainties, developers can still ready themselves for the post-Trump era.
“The minute we get a new administration, there's going to be a lag on everything” before projects head into installation, noted S&P's Murray.
“They can work with the states as well to make sure that there won't be or mitigate as much as possible any local opposition when they do start to start up again,” he added.
Whether a restart happens is of course an open question still, particularly with the loss of tax credits after 2028.
Without tax credits, “states would need to offer much higher subsidies to support projects, which BNEF believes is unlikely,” the consultancy said in its most recent forecast.
Reflecting that pessimism, BNEF has cut projects outside the 5.9GW under construction from its forecast, with no additions through 2040 without tax credits or other federal subsidies.