Stormy Seas: Setbacks and Challenges in Biden’s Offshore Wind Vision
Steve Brown
The Biden administration’s plans for a rapid expansion of offshore wind energy faced a major setback with the cancellation of two large projects off the southern coast of New Jersey. The Danish developer Orsted decided to scrap Ocean Wind 1 and Ocean Wind 2, citing rising interest rates, competition for limited supplies, and political opposition. These cancellations add to a series of setbacks for the administration’s goal to generate 30 gigawatts of offshore wind power by the end of the decade, impacting over half of the offshore power under development nationwide.
Economic Challenges and Political Opposition
Orsted’s decision to cancel the projects was driven by economic factors, including high inflation, rising interest rates, and supply chain bottlenecks. The cancellation of Empire Wind 2, approved by the Biden administration, further complicates matters. The projects were also facing political challenges, with grassroots opposition and campaigns tied to fossil-fuel interests. The cancellation raises concerns about the viability of offshore wind developments in the face of economic headwinds and political resistance.
Impact on Biden’s Clean Energy Goals
The cancellations come at a crucial time for President Biden’s clean energy goals, threatening the administration’s plans to cut carbon dioxide emissions and create union-friendly manufacturing jobs. With over 18 gigawatts of offshore power in limbo, there are doubts about the feasibility of achieving the administration’s offshore wind targets. The industry’s recent struggles may undermine the momentum built by the Biden administration and pose challenges to its ambitious plans.
Orsted’s Strategic Shift
Orsted’s decision to cancel projects in New Jersey raises questions about the future of the offshore wind industry. The company cited changing macroeconomic factors and supply chain challenges as reasons for the decision. While Orsted will proceed with its Revolution Wind project, uncertainties loom over other projects in New York and Maryland. The company’s commitment to the industry remains, but its portfolio is under review, with more decisions expected in the coming months.
Path Forward and Industry Challenges
Despite the setbacks, the Biden administration remains optimistic about the offshore wind industry’s expansion. A White House spokesman highlighted the administration’s strategy, which has attracted significant investment. Lobbyists and industry experts suggest that the Treasury Department could play a role in improving the industry’s fortunes by setting rules for tax breaks. The challenges faced by the offshore wind industry, including economic, political, and logistical hurdles, highlight the need for strong partnerships with government and stakeholders to overcome these obstacles.
