As US stalls, can Canadian offshore wind pick up the baton?
America’s setbacks may hit Canadian port and supplier business while it awaits local steel in the water that most see at least a decade away
With US-Canada relations at their darkest in decades over tariffs and “51st state” gibes, offshore wind's supporters north of the border would love nothing more than to ramp up an industry that the new American President is hammering in his own waters.
The two Atlantic provinces have long been in the frame for sector development on their excellent resources, with wind speeds between 10-12 metres per second and a gently sloping outer continental shelf that would allow for fixed bottom projects well out of eyeshot, eliminating viewshed concerns.
Newfoundland & Labrador under the Liberals are likewise set to pass similar legislation.
“What we can actually generate on the East Coast is spectacular, but we have nowhere to put the power,” said Dawn MacDonald, global offshore wind market sector leader for infrastructure consultancy Aecom.
Market challenges
Canada’s Atlantic provinces are very lightly populated, with Nova Scotia coming in at around one million residents, and vast Newfoundland & Labrador at only half that.
Small populations mean low demand, and while Nova Scotia consumes on average 11,000GWh of power annually, it has set a 5GW target would generate nearly twice that every year, assuming 50% capacity factors.
That said, Canada's Atlantic provinces still depend at least partly on coal and natural gas-fired power that will need to be replaced to meet emissions targets.
“It’s more than possible that at least some of this offshore wind will be supplying local ratepayers in Nova Scotia,” said Abby Watson, CEO of Pennsylvania-based Groundwire Group consultancy that has worked on various projects in Canada.
Production of green hydrogen for export is another potential market.
Several other agreements for green hydrogen have also been signed between the two nations.
While offshore wind had earlier been tipped for green hydrogen production by Canadian authorities, high costs would most likely put it out of the running compared to the region’s also substantial onshore wind resources, though.
“Hydrogen is still pretty speculative, and I don't think anyone's getting financing for an offshore wind project in a new jurisdiction that's dependent on hydrogen,” said MacDonald.
Selling into the larger Canadian grid is another option but this would require substantial investment in onshore transmission and entail major buy-in from communities across thousands of kilometres to reach the population centres in Quebec and Ontario.
“Much like in the US, in Canada, when you build something that crosses multiple municipalities and jurisdictions, you need to get approval from all of those municipalities and jurisdictions,” noted Watson.
“The more borders that you're crossing along your transmission route, it does significantly increase your development risk,” she added.
US subsea transmission
That leaves US New England states as potential markets that could be fuelled by the shutdown of the American sector.
Led by Massachusetts, many New England states went all-in on offshore wind, setting substantial emissions reductions targets dependent on sector capacity that is now endangered by President Donald Trump.
As long promised, on his first day in office Trump issued an executive order banning future offshore wind leasing and permitting while also placing existing projects under review with an eye towards termination or modification.
Massachusetts requires 5.6GW under contract by 2027 but has stated it may need more than 20GW to satisfy its net-zero by 2050 mandate.
Power prices in New England are also among the highest in the nation, reaching $0.30 per kWh in Massachusetts, making it easier to sell costly offshore wind power.
In the group's 2023 white paper, it urged development of a 525kV high voltage direct current offshore ‘backbone grid’ off the Atlantic coasts of both countries.
The concept envisions a 2GW line traversing 621 miles (1,000km) from Nova Scotia to Boston, that could offer benefits totalling some $780m annually for ratepayers through market efficiencies.
Such a project would benefit from only requiring approval of federal authorities, bypassing the myriad local permits needed for onshore transmission.
It would also require billions in capital, years of planning, and the go-ahead of the US president.
Presidential approval for an offshore wind power link with Canada is likely not forthcoming under Trump, but “that will be a project that goes beyond this current US administration,” said Elisa Obermann, executive director of Marine Renewables Canada, a trade group advocating for at-sea renewables.
Nova Scotia is planning its 5GW seabed lease auction for this year, while Newfoundland & Labrador may go forward in 2026, potentially kickstarting development.
The nation currently has one project in development, the 300-400MW Nova East Wind array by a joint venture of SBM Offshore and DP Energy Canada.
The project lacks a seabed lease and is expected to participate in Nova Scotia’s auction.