Trump’s Executive Order Delivers Blow to US Offshore Wind

U.S. offshore wind players are again facing tough times after President Donald Trump temporarily halted new wind leasing and permitting effective Jan. 21.

The executive order was issued Jan. 20 pending an environmental, economic and ecological review led by the Interior Department, according to the White House. For existing wind energy leases, the review will determine whether there is a need to end or amend such leases and identify legal bases to do so.

“In essence, the chances of any new offshore wind developments in the U.S. are zero for now,” said Artem Abramov, head of New Energies Research for Rystad Energy.

A backer of oil and gas, Trump is a known critic of wind energy and some other lower-carbon energy sources. Prior to his return to the White House, the Republican vowed to pull back on many of the climate-focused initiatives of his predecessor President Joe Biden. On day one, he followed through as executive orders rolled out, including one directing the U.S. to again withdraw from the Paris climate agreement.

“We have something that no other manufacturing nation will ever have—the largest amount of oil and gas of any country on earth—and we are going to use it. We’ll use it,” Trump said in his inaugural address. He later added, “With my actions today, we will end the Green New Deal.”

The wind energy memorandum, which is effective until revoked by Trump, also prohibits relevant federal agencies, including the Interior Department, Department of Agriculture, Department of Energy and Environmental Protection Agency, from issuing or renewing approvals, rights of way, permits, leases or loans for onshore or offshore wind projects until the assessment is complete.

The Interior Department was also directed to review the record of decision for the onshore Lava Ridge Wind project in Idaho, which was temporarily halted by the order. The project being developed by Magic Valley Energy had drawn public opposition. It had been approved by the Bureau of Land Management in December with fewer turbines than originally planned.

During the past 25 years, installed wind power generating capacity has been increasing in the U.S. Data from the U.S. Energy Information Administration (EIA) shows capacity jump to more than 150 gigawatts in 204, from 2.4 GW in 2000.

Wind power challenges

Most of the wind generation is produced onshore, but efforts are underway to boost offshore wind capacity with the Biden administration targeting 30 GW by 2030. Offshore wind developments, however, have been challenged in recent years as supply chain woes, inflation and interest rates pushed up costs. But the sector has shown signs of improvement, having renegotiated contacts and advanced projects.

For some, impairments keep coming. Ørsted, which is developing wind farms onshore and offshore U.S., reported on Jan. 21 a $1.69 billion (DKK 12.1 billion) impairment in fourth-quarter 2024 related to its 924-MW Sunrise Wind project offshore Massachusetts, interest rate increases and seabed leases. The company said Sunrise Wind is progressing on a tight construction schedule as it navigates supply chain and construction challenges.

Mads Nipper, group president and CEO of Ørsted, said the company remains committed to the U.S. market and that Sunrise Wind is still profitable.

Speaking during an analyst call Jan. 21, Nipper said the company is in the process of reviewing the executive order to determine its impact on Ørsted’s portfolio.

“The U.S. currently has around 2.4 gigawatts (GW) of advanced-stage offshore wind developments that have reached final investment decision and are under construction, which are unlikely to be impacted by the order,” said Abramov. “Moderate risk amid the unfavorable investment climate is present for 10.5 GW of projects which secured necessary permits but have not reached investment decisions. The remaining 25 GW of early-stage projects are unlikely to see any progress under the current administration.”

Trump’s wind executive order, one of several issued on his first day back in office, also drew strong opposition from the American Clean Power Association (ACP), whose chief executive says inconsistent policy stands in the way of energy dominance.

“The contradiction between the energy-focused Executive Orders is stark: while on one hand the Administration seeks to reduce bureaucracy and unleash energy production,” ACP CEO Jason Grumet said in release. “On the other it increases bureaucratic barriers, undermining domestic energy development and harming American businesses and workers.”

He added wind power is essential to meeting rising electricity demand and creating American jobs.

“In fact, states voting for President Trump are eight of the top ten states in terms of reliance on wind power, with many depending on wind for a significant share of their electricity use,” Grumet said. “Restricting wind development in these regions is certain to increase consumer energy bills.”