Companies Pull Back on U.S. Offshore Wind Investments Amid Setbacks

Feb 13 (Reuters) – Companies that committed to investments in U.S. 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 U.S. 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 Oceantic.

As recently as 2022, market research firm 4C Offshore had forecast the U.S. 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 25 GW 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 maximizing already record-high U.S. oil and gas production. He also pledged to slash public spending that former President Joe Biden had directed toward fighting climate change.

Ships, Ports, and Cables

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

The industry had seen a total of around $2 billion worth of orders in the past decade for dozens of ships to move crews and supplies offshore and to install turbines, Oceantic 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 around, and small businesses look at empty order sheets,” Francoeur said.