Investors in US offshore wind projects pull back after two-year downturn

Bengaluru — Companies that committed to investments in US offshore wind infrastructure and supply chains are scrapping their plans as the projects they were meant to serve face huge setbacks, including President Donald Trump’s plan to end federal support.

The pullback reflects the trickle-down effect of a dramatic downturn in the US offshore wind industry over the past two years that has caused lengthy delays, cost increases and even failures of many of the nation’s proposed offshore wind farm projects. It could cost thousands of planned jobs and billions of dollars in investments.

“When a project fails to move forward entirely, there is a ripple effect for businesses across the national supply chain that isn’t limited to a single state,” said Stephanie Francoeur, senior vice-president of marketing and communications at the offshore wind industry trade group Oceanic.

As recently as 2022, market research firm 4C Offshore had forecast the US market would exceed former President Joe Biden’s goal of installing 30 gigawatts of offshore wind by 2030. The firm last year said it now expects under 25GW to be installed by that time.

A major offshore wind port in New Jersey, billed as the first staging ground for the industry’s planned expansion on the East Coast, is being repurposed; billions of dollars in contracts for new offshore wind support vessels have dried up; and manufacturers are scrapping their plans, according to public statements and Reuters interviews with 10 company executives, business groups and state officials.

Once seen as a bright area of growth in the burgeoning clean energy sector, the offshore wind industry has been stung by soaring costs and, more recently, the prospect that Trump will end crucial government support in the form of federal lease sales, permits and subsidies.

Trump last month issued an order to pause new federal offshore wind leasing, calling wind turbines ugly, expensive and harmful to wildlife.

Trump has called global warming a hoax and has promised to focus his policies on maximising already record-high US oil and gas production. He also pledged to slash public spending that former President Joe Biden had directed towards fighting climate change.

Shipbuilders have seen a swift decline in vessel orders to serve the offshore wind industry, something that could impact boat builders as well as US steelmakers, according to Oceanic.

The industry had seen a total of about $2-billion worth of orders in the past decade for dozens of ships to move crews and supplies offshore and to install turbines, Oceanic said.

Nearly $1.5-billion of that amount remains on order or under construction. But in 2024, only one order was made for a ship.

“Manufacturers and steel providers across the Midwest lose expected work they based plant expansions about, and small businesses look at empty order sheets,” Francoeur said.

New Jersey’s economic development agency said this month it was speeding up its search for alternatives for a dedicated offshore wind port in Salem County, citing in part the change in federal policy.

The 8.9km² project was proposed by the state in 2020 as the nation’s first purpose-built offshore wind port, with facilities that could support the immense size and weight of turbines that can be more than 100m long and weigh more than a fully loaded 747 jet.

“We remain believers in the long-term potential of offshore wind for New Jersey, but our role as stewards of taxpayer resources requires us to evaluate all of our options,” it said in a statement.

Earlier, New Jersey state utility regulators declined to award a contract to the only bidder in a recent state procurement program, Atlantic Shores, which had been a joint venture between EDF and Shell before the oil and gas major pulled out last month.

Danish rival Orsted had been a tenant of the port before it cancelled two New Jersey projects in late 2023.

The thousands of jobs the port had promised to create are now in jeopardy, according to Christina Renna, president of the Chamber of Commerce Southern New Jersey.

“Other wind companies, if still interested, would be perfect but given the climate, unlikely,” Renna said, adding the site would also work for the oil and gas sector or large manufacturers.

In New York, two ports along the Hudson River were expected to benefit from $2-billion in industry spending on factories to produce offshore wind components such as blades and towers that would be floated down the river to projects offshore.

But GE Vernova last year scrapped plans for a larger offshore wind turbine, pulling out of a deal to produce the equipment at the Port of Coeymans.

The nearby Port of Albany began millions of dollars in upgrades in 2021 to support a planned tower factory, but that facility has since languished due to soaring costs.

“Unfortunately, with changes to the offshore wind and renewables industry — impacted by federal administration policy changes and change in commitments from developers — the project as it was originally planned has changed to a phased approach to development,” Port of Albany spokesperson Penny Vavura said.

The port’s future in offshore wind will depend on whether it receives state funding under a procurement that is expected to be announced this year, she said.

A spokesperson for the Port of Coeymans, where electrical and utility contractor Riggs Distler is producing turbine foundation components for Orsted’s Sunrise Wind project, said it was closely monitoring the federal policy landscape but that its operations and plans were so far unchanged.

The Port of New Bedford in Massachusetts has served as the staging area for construction of Vineyard Wind, the nation’s first major offshore wind project. It expects to serve subsequent projects, but is waiting to see the outcome of a new federal approach.

“Offshore wind has presented us with a diversification opportunity for the port to supplement our core industries of commercial fishing, recreational boating, cargo and other marine activities,” Gordon Carr, the port’s executive director, said in an interview. “That work will continue with the ongoing Vineyard Wind project, and we will wait and see on what comes next.”

Submarine cable producers are also pulling back.

Italy’s Prysmian announced last month it was abandoning its plan to build a submarine cable factory in Massachusetts to serve the offshore wind market.

The company revealed its change of plans the day after Trump took office, but said the decision was not political. The company’s €18-billion backlog in its transmission business is located entirely in Europe, a spokesperson said.

A competitor, LS Greenlink — a division of Korean cable maker LS Corp — said it remained committed to its plan for a $681-million submarine cable factory in Chesapeake, Virginia. It said it can serve European customers from that facility and could produce land-based cables if needed.

But Patrick Shim, LS Greenlink’s MD, said the company had paused plans for an expansion of that facility.

“That could be nine to 10-figure investments and potentially hundreds of jobs, but we just cannot make that plan right now.”

Reuters