One of the initial actions taken by Donald Trump as president was the signing of an executive order that poses a significant threat to the emerging offshore wind industry in the United States.
The executive order, signed on a Monday, stopped federal leasing agreements for offshore wind projects along the outer continental shelf. This area is beneficial due to its consistent high wind speeds, while still being close enough to shore for accessibility.
According to the order, “This withdrawal does not affect leasing associated with other activities such as oil, gas, minerals, and environmental conservation,” as outlined in the document.
While the order does not impact projects that already possess signed leases, it instructs the Secretary of the Interior to evaluate existing contracts for potential termination or modification.
The offshore wind industry has faced considerable challenges in the United States, with only a few operational offshore wind farms contributing to a mere 174 megawatts of capacity as of late May, according to the National Renewable Energy Laboratory. This figure represents a tiny fraction of the global total of 68 gigawatts, predominantly found in Europe and China.
Despite these challenges, the industry’s outlook was beginning to improve, with 4.1 gigawatts currently under construction, 3.4 gigawatts approved, and an additional 19.8 gigawatts progressing through the permitting stage. Collectively, these efforts were aimed at achieving the Biden administration’s target of expanding offshore wind capacity to 30 gigawatts by the decade’s end.
Although offshore wind energy is comparatively more expensive than other power sources, its reliability and proximity to large population centers — including data centers — have made it appealing. In Europe, for instance, data center operators have been eager to secure agreements. Last year, Google committed to purchasing 478 megawatts of offshore wind energy to support two data centers in the Netherlands.
In the United States, the development of offshore wind projects has been impeded by public opposition as well as insufficient infrastructure necessary for the construction and installation of turbines. Additionally, the abundance of inexpensive, windy land in the country’s interior has favored the expansion of onshore turbines instead.
Since the majority of offshore wind development is taking place overseas, Trump’s executive order is unlikely to completely eliminate offshore wind energy in the U.S. Instead, it may lead to the further growth of the sector in nations where companies can gain valuable experience while awaiting a more favorable U.S. market environment.
Compiled by Techarena.au.
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