Fitch unit slashes 2033 US offshore wind forecast to 5GW on Trump thump

Fitch-owned energy analytics firm BMI has lowered its forecast for US offshore wind installations by 2033 to just 5GW on impacts by sector antagonist President-elect Donald Trump.

This is a sharp decline from predictions by other firms prior to November's election that saw as much as 20GW-plus by 2030.

While President Joe Biden pushed the sector with his 30GW by 2030 goal, Trump has made support for fossil fuels a centrepiece of his next and final term in office and vowed to stop offshore wind “on day one” of his next presidency.

“At the moment, we're only forecasting the developments that are physically under construction,” said Eoghan Curran, analyst for the consultancy, a subsidiary of the group that owns global ratings giant Fitch.

“We still believe those will go ahead, but we've a lot of reservations about even the ones that have permits approved.”

Under construction

The US offshore wind roster includes one commercial scale project completed, Orsted’s 132MW South Fork array. Three more projects are in at-sea construction, including Orsted’s 704MW Revolution, Avangrid-Copenhagen Infrastructure Partners (CIP)’s 800MW Vineyard Wind, and Dominion Energy’s 2.6GW Coastal Virginial Offshore Wind array.

Orsted’s 920MW Sunrise has begun onshore construction, with offshore installation slated to begin next year.

Beyond this, federal regulator Bureau of Ocean Energy Management (BOEM) has approved another 10GW of project capacity, more than half of which has state offtake contracts.

As in his first term, Trump is expected to slow down permitting and leasing for the sector. BMI stands out for suggesting that the future president would do more to actively curtail the sector, including derailing projects that already have BOEM’s greenlight.

“The fact that BOEM is federally owned, he can apply an executive order just to quell those,” Curran said, despite the risk of ensuing litigation.

The firm sees even high levels of industry support from Northeast states not sufficient to forestall cratering development.

“New York, New Jersey and Massachusetts have ambitious offshore wind targets, but decreased federal support could impact state-level initiatives and procurement rounds,” BMI said in a research note.

The US sector was slammed by inflation and consequent spike in interest rates over the past two years, with nearly all offtake contracts either withdrawn or renegotiated at higher rates.

States have made progress in re-contracting lost capacity, but not even this has gone as smoothly as hoped in the much-anticipated industry reset.

“Even before Trump, the US offshore wind market was seen as overly ambitious and quite nascent,” said BMI’s head of power & energy transition Thomas van Lanschot.

“The supply chain risk in the US is still very present, and if you start compounding inflationary pressures that still persist with Trump tariffs and federal oversight running challenges of him slow walking potential issues, all of those issues compound to this very bearish outlook,” he added.

States in progress

New York closed its fifth-round procurement (NY5) for at least 2.6GW, but two of the bidders – TotalEnergies’ Attentive Energy 1 and RWE-National Grid’s Community Offshore Wind – are faltering, either pulling out entirely or placing projects on the backburner due to the imminent Trump presidency.

New York has seen over 8GW of capacity cancelled due to inflation, financing costs and supply chain turmoil, and now has 1.8GW under contract towards its 9GW by 2035 mandate.

New Jersey has also had a tumultuous ride in offshore wind, losing 2.25GW of capacity with Orsted’s cancellation of its Ocean Wind 1 & 2 arrays, leaving it with Shell-EDF's 1.5GW Atlantic Shores under contract. The state closed its Round 4 with some 4GW of bids under consideration.

Massachusetts spearheaded sector development with Vineyard Wind 1 but saw the remainder of its capacity collapse in 2023. It has since re-contracted much of this capacity, including 1GW of Ocean Winds’ SouthCoast, with some 2.8GW contracted in its Round 4.

Beyond offshore wind, BMI views Trump's impact on the onshore wind and solar as muted.

"While we've revised down our forecast slightly, and for those, we don't think they will be as badly affected at all," said Curran.