Trump offshore wind assault sends 'shock waves' through US energy financing

President Donald Trump’s offshore wind project stop-work orders are sending shock waves through all US energy project financing, creating a potential scenario where his energy dominance agenda will fail, “done in by collapsing investor confidence,” according to the Institute for Energy Economics and Financial Analysis (IEFFA).

While anchored by fossil fuels, his self-proclaimed energy dominance strategy includes baseload sources like geothermal, large hydro, and nuclear, but pointedly excludes wind and solar.

He continued: “Unpredictable risks and threats to resources — regardless of technology — that have made significant capital investments, secured necessary permits, and are close to completion will stifle future investments.”

Referring to Orsted’s 704MW Revolution Wind off Rhode Island, he wrote: "Politicians of all stripes are entitled to their opinions but forcing a work stoppage at a facility where roughly 80% of the work is complete calls into question the trustworthiness of pledges made by the US government."

The 23 August move against Revolution Wind was bad policy and set a bad precedent, according to Wamsted.

A banker being asked to finance a natural gas or nuclear facility Trump wants “likely will think hard before lending money to a project that could be stopped at the 11th hour by a future administration,” he argued.

At a minimum, the current administration’s actions are likely to raise the financing costs for some projects. Some could be unfinanceable, such as nuclear plants that require long lead times and have extremely high capital costs.

“If an investor-owned utility is relying on federal government financial support for a nuclear project, state regulators are likely to have second and even third thoughts before approving such a deal, given the massive economic risks it would place on the utility’s ratepayers,” he wrote.

Trump’s stop-work orders could undercut billions of private investment dollars for offshore wind, mainly from European electric utilities and energy companies in the vanguard of US sector development.

Wamsted noted that even when Trump lifted a stop-work order, as was the case with Equinor’s Empire Wind I, the shutdown cost the developer roughly $200m.

Citing the administration’s opposition, Wamsted said the future of three New England offshore wind projects under construction is in doubt.

These are Revolution Wind; Orsted’s nearby 924MW Sunrise Wind with cabling and substation civil work well underway; and 800MW Vineyard Wind, a joint venture comprising Copenhagen Infrastructure Partners and Iberdrola’s Avangrid subsidiary, with at least 20 of an eventual 64 turbines generating power.

Also at risk is Avangrid’s fully permitted New England Wind 1 and 2 off Massachusetts, which is in advanced development and scheduled for 2029 commercial operation. Wamsted lists the two phases as having 1.87GW.

Court documents show that the Department of Interior, which oversees energy development on the outer continental shelf, will move to vacate federal approvals by 10 October.

Wamsted did not mention SouthCoast Wind, the EDP Renewables-Engie joint venture Ocean Winds array with 1.2GW in awarded off-take, that is also in the administration's crosshairs.

This project, not as far along in development as New England Wind, is located south of Massachusetts and Rhode Island.

Wamsted warns there are no other short-term alternatives for offshore wind in New England.

“The supply of gas turbines is effectively sold out until 2030, new nuclear is 10 years away and the one remaining coal plant in the region is already 65 years old (ancient by coal standards) and extremely expensive,” he wrote.