U.S. Offshore Wind Farm Faces Delays Amid Market Uncertainties
Yet another major U.S. offshore wind farm is being delayed with the executives citing the uncertainties created in the market since the election of Donald Trump. Portugal’s EDP Renewables reported as part of its earnings that it will be taking an impairment charge despite the fact its project off Massachusetts is fully permitted and while saying the company still believes in the project.
Project Background
The lease for Southcoast Wind (originally known as Mayflower Wind) was awarded in December 2018 and the project is under development in a joint venture between EDP Renewables and Engie. The wind farm was selected in the tri-state solicitation in 2024 with Massachusetts and Rhode Island agreeing to split power from the 2.4 GW project. In one of its final acts, the Biden administration approved the construction plan for the wind farm on January 18, 2025.
Impairment Charge and Delay
As part of its year-end financial reports, EDPR said today, February 27, took an approximately $139 million impairment charge in the fourth quarter of 2024 as it postponed the project. Final negotiations were underway with Massachusetts, while financing and the interconnects were in place, and the company said it had an “attractive” power purchase agreement.
Construction on the U.S. wind farm was expected to begin in 2025. The company had previously projected the wind farm which would be located 30 miles south of Martha’s Vineyard and 20 miles south of Nantucket would be completed by 2030. The new timetable does not anticipate starting construction until 2029.
Company’s Stance
“That’s a slightly worst case scenario,” Miguel Stilwell d’Andrade, chief executive of EDPR told analysts during the investment community conference call. He said the company was still working on the project getting it “ready to go,” but that it has “taken the more prudent approach,” anticipating a delay.
The company told the analysts that it does not intend to abandon the project but it is the “prudent approach given recent executive orders and permit reviews.” Further, it cited the slow pace of approvals in Europe noting that it would be reducing its pace of investments in renewable capacity in 2025 and 2026.
Other Developments
The joint venture company, Ocean Winds, also holds earlier stage leases in the United States for Bluepoint Wind in the New York Bight and Golden State Wind off California. The company is active in a total of eight countries and highlights that it continues to make progress on its projects in Europe and Asia. It was also granted a feasibility license by the Australian Government in 2024.
EDP Renewables follows moves by several other developers adjusting their U.S. projects. France’s EDF reported last week that it was writing down its investment in the Atlantic Shores project planned for New Jersey. Shell had earlier said that it was exiting the project joint venture.
Conclusion
Despite the challenges faced by U.S. offshore wind projects, some like Vineyard Wind 1, Coastal Virginia, and Revolution Wind are proceeding as planned. The uncertainties in the market highlight the impact of policy changes and permit reviews on the renewable energy sector, emphasizing the need for stability and support for the industry’s growth.