[[{“value”:”
- The U.S. offshore wind industry, pivotal to the energy transition, faces a potential shutdown under a Trump presidency.
- Offshore wind development has struggled with high costs, safety concerns, and wildlife impact controversies.
- The election outcome is crucial for the industry’s future, with industry leaders and union representatives asserting that a Harris-Walz win would support offshore wind growth.
The U.S. offshore wind industry has been one of the pillars of the energy transition as envisioned in the IRA. It has been drawing in investors spending billions on turbines stuck into the seafloor to supply nearby communities with power. Now, this industry is under threat.
The United States votes Tuesday for its next president. The Republican Party’s candidate, Donald Trump, has been generating headlines in abundance, and offshore wind has been among the topics of these headlines. Trump has vowed to ban offshore wind specifically with an executive order on the first day he’s in office.
“We are going to make sure that that ends on day one,” Trump said on the campaign trail. “I’m going to write it out in an executive order. It’s going to end on day one.” The Republican candidate did not stop there, adding “They destroy everything, they’re horrible, the most expensive energy there is. They ruin the environment, they kill the birds, they kill the whales.”
Offshore wind energy is indeed rather more expensive than its onshore equivalent and solar. Costs vary by geography as well. Indeed, earlier this year, the head of Germany’s largest power utility, RWE, warned that the costs of offshore wind development in the United States were as much as 30% higher than they were in Europe—and that’s despite Europe’s energy cost crunch.
The world’s top wind power developer, Orsted, last year canceled a large-scale U.S. project due to cost, incurring an impairment charge of $5.6 billion. Norway’s Equinor and BP also canceled a joint offshore wind project earlier this year because of cost inflation.
“When I look at the current offshore wind program, it will take some time to make it more competitive,” RWE’s Markus Krebber said in March at the CERAWeek energy conference. Indeed, the above examples suggest that despite the generous IRA subsidies, it will take a while for U.S. offshore wind power to start making economic sense for developers.
Regarding the adverse impact of wind turbines on wildlife, there is evidence that wind turbines do kill birds and bats. The impact of offshore wind turbines on whales has attracted a lot of controversy, with pro-transition outlets claiming there was no evidence of a causal relationship between the proliferation of offshore turbines and the increase in whale deaths, but it seems not everyone is convinced.
Offshore wind has sort of struggled to take off in the U.S. because of supply chain issues as well, not to mention a rather unfortunate incident with an offshore wind turbine off the coast of Martha’s Vineyard when a blade broke off the turbine, spilling debris into the ocean and sparked worry about the safety of offshore wind, The project, which was supposed to end up with as many as 62 turbines in total, has been suspended indefinitely.
There have been forecasts that investments in U.S. offshore wind power generation could reach $65 billion by 2030, with 14 GW of generation capacity getting built by that year. Per plans, this would then more than double to 30 GW between 2030 and 2033, and grow further to 40 GW by 2035. However one looks at the numbers, they are certainly ambitious—to date, total offshore wind capacity in the country stands at just 42 MW.
In the context of the potentially huge growth opportunity for offshore wind power generation developers available in the Inflation Reduction Act, the Tuesday vote could really make or break the industry, even with the current challenges.
“Everything depends on next Tuesday. A Harris-Walz win, next Tuesday is good news for the offshore wind industry. A Trump-Vance win, next Tuesday is terrible,” the president of North America’s Building Trade Unions—an alliance of more than a dozen unions—said at the Offshore Windpower conference that took place in New York last week. Sean McGarvey went on to predict a win for the Democratic candidate to much applause, according to the FT.
“The fact that this election is so polarized across the country I think increases the sense of uncertainty, not just around the economic questions about the deployment of offshore wind, but people are generally quite passionate about the direction of the country. So I think we felt just a bit of anxiety that was much broader than anybody’s commercial commitments,” said the chief executive of the American Clean Power Association, which organized the event, Jason Grumet.
A Trump presidency would be a major setback for an industry that basically runs on ambition right now. Despite the recent rate cut—and expectations for more of these—the cost of building offshore wind installations remains quite high. The controversy over the death of whales and birds is not going away anytime soon. The safety risks will remain in the public mind as well. Come to think of it, if Donald Trump wins and bans offshore wind, he might in fact be doing a favor to an inviable industry.
By Irina Slav for Oilprice.com
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The post Offshore Wind Faces Potential Trump Ban on Day One appeared first on Energy News Beat.
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