‘Watch your back’: Atlantic Shores offshore wind permit axe shows Trump intends to ‘halt projects’ 

Donald Trump spotlighted the EDF-Shell-owned array at a rally in Wildwood, New Jersey, last May when he vowed to stop the industry “on day one” of his term. Good to his word, on his 20 January inauguration President Trump issued an Executive Order (EO) banning future offshore wind leasing or permitting, while also putting approved projects under review with an eye towards termination or modification.

Previously, the US industry had thought that the 19GW of capacity spread across 11 projects approved under Biden would be safe from executive interference, and Interior Secretary Doug Burgum recently said permitted arrays “will receive different treatment than those that are proposed”.

“That is clearly no longer the case,” said Philip Totaro, CEO of renewables analytic firm IntelStor. “Now everybody needs to watch their back.”

Lead federal regulator, the Bureau of Ocean Energy Management (BOEM), issued its Record of Decision greenlighting the project’s environmental review last May and signed off on its construction and operations plan in October. Atlantic Shores began onshore transmission work last summer.

Atlantic Shores struggle

This is only the latest setback for the imperilled project that has faced fierce local opposition and surging inflation and interest rates that are widely assumed to have rendered its $58.8/MWh offtake contract no longer viable.

Last month equity partner Shell paused its involvement in the 1.5GW project contracted to New Jersey after suffering a nearly $1bn impairment on its declining value. Shell retains its half stake in the Atlantic Shores joint venture with three leases off the Garden State, including one in the New York Bight. Partner EDF likewise took a $941m hit but maintains that the project is on track, despite the state conceding that its massive New Jersey Wind Port in Salem County will likely be deployed for some other industry.

Offshore wind development occurs overwhelmingly in US waters more than 3 nautical miles (5.5 km) off state coastlines, and the EPA clean air permit is just one of ten federal approvals projects must obtain, from at least five regulators.

Along with the EPA, BOEM steers the permitting regime in consultancy with National Oceanic and Atmospheric Administration’s Fisheries Service, the US Army Corps of Engineers, and the Fish and Wildlife Service.

‘Dangerous precedent’

The EPA motion “definitely sets a very unfortunate precedent that could be used to ‘dis-permit’ other US projects in the future,” said Laura Fecova, US lead for offshore wind intelligence firm Aegir Insights.

John Murray, senior wind research analyst for S&P Global Commodity Insights, said “it’s still early days to determine whether this marks the beginning of a broader ‘dis-permitting’ trend for approved offshore wind projects.”

Murray said S&P is still observing what the project review process entails and the EPA’s move to pull its permit “is an isolated case or a signal of broader delays”.

Longer term, Trump’s actions against the industry could cause developers to “be wary of investing in a capital-intensive sector with long lead times that faces such demonstrable high election risk,” said ClearView’s Fox.

The administration’s moves “could significantly stymie market confidence in offshore wind permitting, notwithstanding the continued strong and stable state policies that support development,” added Fox.

Aegir’s Fecova said: “The instability of [the] US as a market could discourage future build-out, especially for projects where developers can still walk-away with relatively low financial losses.”