U.S. Offshore Wind at an Impasse

After a surge of optimism, the U.S. offshore wind industry faces its most serious challenges yet. Just a year ago, the sector seemed poised for rapid growth, with East Coast states making offshore wind a centerpiece of their clean-energy and reliability strategies. Today, that progress has been sharply interrupted.

The reversal has been swift. Since returning to office, the Trump administration has halted new federal leases and permits and ordered work stopped on projects already under construction, moves that put billions of dollars in investment at risk. By September, Interior Secretary Doug Burgum declared that, under current policy, there is no future for offshore wind in the United States.

Yet the industry’s troubles, despite strong progress, began well before this political turn. Inflation, high interest rates, and supply-chain disruptions sharply increased project costs, forcing developers to cancel or renegotiate contracts. Earlier, states had made strategic missteps in their race to capture offshore wind jobs and supply-chain investment, leaving the industry more exposed to shifting economic and policy winds.

Elizabeth Wilson of Dartmouth College, founding director of the Irving Institute for Energy and Society, discusses how these experiences have shaped an emerging body of “institutional learning” across the states—lessons in risk sharing, coordination, and governance that may help buttress the industry for the long term. As the future of U.S. offshore wind hangs in the balance, Wilson offers perspective on how those lessons could form the foundation for progress in a political and economic environment that remains volatile and uncertain.

Full Transcript

Andy Stone: Welcome to the Energy Policy Now podcast from the Kleinman Center for Energy Policy at the University of Pennsylvania. I’m Andy Stone.

The US offshore wind industry is facing its most serious challenges to date. The industry, which had appeared on track for rapid development when the Inflation Reduction Act was passed three years ago, has since seen federal support vanish. The dramatic changes began in January, when the Trump administration halted new offshore wind leases and permits, and soon after, issued stop-work orders for projects already under construction, putting billions of dollars of investment at risk. By September, Interior Secretary Doug Burgum made the administration’s point unmistakable, stating that under current policy, there is no future for offshore wind.

Yet, even before the national political winds turned against it, the industry was already under heavy strain. Inflation, elevated interest rates, and supply chain bottlenecks all led to substantial cost increases, driving developers to seek to renegotiate their contracts with sponsoring states and to cancel projects. And earlier on, states seeking to develop offshore wind had made strategic missteps of their own, making the industry more vulnerable to unexpected policy and economic shifts.

On today’s podcast, we’ll take a big picture look at the past half decade of offshore wind development with Elizabeth Wilson, Professor of Environmental Studies at Dartmouth College and founding director of the Irving Institute for Energy and Society. Elizabeth has written extensively on the US offshore wind industry, and on its central role in coastal states’ efforts to meet rising power demand and environmental goals. Her work focuses on institutional learning and how lessons learned over this period might be helpful to the industry in enduring what’s likely to remain a turbulent political and economic era. Elizabeth, welcome to the podcast.

Elizabeth Wilson: Thank you so much, Andy. I’m really, really pleased to be here.

Stone: I thought we could start this conversation with a bit of a snapshot of where the US offshore wind industry stands today. So under the Biden administration, there had been a goal of developing 30 gigawatts of offshore wind by the year 2030, just five years from now. So I want to ask you. Where were we in terms of that trajectory, let’s say at the end of 2024, and how has that trajectory changed under the Trump administration?

Wilson: I think this is a good question, and I want to back up and give a little bit of context. When I think about the energy sector, I think about the tools— the technologies that we’re trying to deploy. I think about the rules— the policy context. And then the jewels. How is that energy being put into our markets to fulfill those critical societal energy services?

And for offshore wind, this is a global technology. Right now we have about 83 gigawatts deployed globally—as a rough order of comparison, the US grid is roughly 1000 gigawatts— with 11 gigawatts added last year. About half of that was in the EU, the other half was in China. In the EU, 20% of that is in the UK, and then 11% in Germany. Denmark and Belgium have about 3% each.

So the top global markets— China, the UK, Taiwan, Germany, France— that’s where 94% of new offshore wind additions go. And so the US, when we adopted our very, very aggressive goals, we had them driven by the states and then recently supported by the federal government, as you mentioned with the IRA. And so the East Coast states— ten East Coast states from Maine to North Carolina— have committed to developing offshore wind in the energy sector, collectively, with targets now of about 83 gigawatts of capacity-planned goals by 2050. This exceeds— just to give us again, the scale of how big 83 is—all of the electricity generation sources currently installed in New England, that’s about 30 gigawatts, and the New York ISO, which is about 43 gigawatts.

And so these ambitions are incredibly aspirational and aggressive, but they’re also strong and consistent with some of the best offshore wind development conditions globally. On the East Coast of the US, we have a very narrow continental shelf with strong and consistent wind resources, and that’s very conducive to the technology that is the dominant technology deploy globally, fixed bottom turbines. And there’s also the proximity to densely-populated East Coast states that have a really strong demand for energy.

And so back in 2024 you were really seeing, after some challenges that we’ll explore today, kind of a resurgence, and a lot of the projects that had been challenged righting themselves and going forward. And so to date, we have the state goals that I mentioned before— East Coast, about 80 gigawatts. Of those, we have 19 gigawatts that have federal approval for construction, and about 5.9 gigawatts where the installation of offshore wind is in progress. Oceantic is an organization that calculates this and tracks where the projects are going forward.

Stone: You said that 19 gigawatts have been approved, 5.9 are going forward or in progress. Those that are approved, are they looking like they’re going to move forward. Or are there some some hurdles there?

Wilson: Huge hurdles. They are not going to go forward. Let’s concentrate on the 5.9 gigawatts that are currently in progress. And so, you know, five years ago, we just had the five turbines that were in Block Island and two turbines down in Virginia. And so the fact that we have so much offshore wind under construction today is pretty remarkable.

Again, we’re building a new sector. And as a researcher, when I think about this and look at how we’re trying to build offshore wind in the US, I pull from a Danish researcher named Bent Flyvbjerg, whose work focuses on megaprojects. And megaprojects are projects that are over a billion dollars, large scale. And megaprojects— he has a database of megaprojects all over the world. They’re usually late, politically contentious, and hard to get done on time.

And so when we think about the offshore wind projects that we’re trying to build, projects that are 700, 900 megawatts offshore, we’re building megaprojects. $3 billion, $5 billion, and that’s just the offshore investment. We also then have the onshore grid investments that are needed to connect that power to our energy system.

And so building a whole new sector is incredibly ambitious. And building it as rapidly as we had hoped to do is even more ambitious. And so I honor that spirit of wanting to get this done and wanting to get this done quickly, and I appreciate that megaprojects are hard. And megaprojects take not only the technology, but also the institutions and changes in our energy system to be able to allow that technology to happen at scale.

Stone: So before we get into some of the challenges that you’ve already started to allude to, I want to understand exactly why the coastal states pushed so heavily into offshore wind. What were the problems they were trying to address, the policy goals they were trying to achieve through offshore wind? Give us the rundown, again, of their motivations to go so strongly into offshore wind development.

Wilson: East Coast states need carbon free power. They need it to meet their climate goals, but they also need power in general, just because of their systems being as constrained as they are. And offshore wind provides a technology that can build that power at scale. Also, developing an offshore wind business in the States provided a powerful tool for economic development. They would be also building out supply chains. They’d be training labor forces. And they’d be developing port infrastructures that had been neglected, oftentimes, on those East Coast states.

And when you look at all of the investments— over 5.2 billion in the New Bedford Marine Commerce Terminal, the Salem Offshore Wind Terminal, the Port of Providence, New London State Pier, South Brooklyn Marine Terminal, New Jersey Wind Port, Trade Point Atlantic, Portsmouth Marine Terminal. You have steel, cable, ports, shipyards that were also part of this offshore wind development story. So we think about it as an energy technology, and that’s usually how I think about it. But the more I’ve studied this, I’ve also really appreciated those economic development and supply chain issues that end up being very, very important for the technology and for the East Coast states.

Stone: So this was clearly a clean energy opportunity, a resource adequacy opportunity, as well as an economic opportunity for these states. To sum it up.

Wilson: Absolutely. Great offshore wind resource, great potential for economic development. And with the megaprojects being— you know, I think Vineyard is 800 megawatts. Revolution is 700 megawatts. CVOW, the Central Virginia offshore wind, 2.5 gigawatts. I mean, these are enormous projects that we’re building up and down the East Coast. And so, really providing energy demand for East Coast communities.

Stone: So it all sounds so great, all sounds so positive. But the reality is that even before the political winds turned against the industry earlier this year, the industry was already under stress during that 2020 to 24 period that we’ve already started talk about. And we had Covid during those years. Obviously, the Ukraine war, which is still ongoing. And as a result of a myriad challenges, there were project cancelations that happened even under the most positive of domestic federal policy environments. So tell us, what were those project cancelations about? What were the stresses during those four-year periods that, again, before we even get to 2025 are causing some problems for development of the industry?

Wilson: Andy, you have just nailed it. And that is actually what kind of got us started on our research projects. Because you had a lot of literature, some of which I helped to write, about how the cost of offshore wind had decreased rapidly, especially in the northern European market. And suddenly you had a technology that no longer needed the subsidies. It was bidding in auctions. The costs had really come down. And the interest, then, for East Coast states, was great. And so a lot of these development goals, these initial project goals, were happening at a time where we had really low interest rates. And when you’re building a multi billion dollar project and using debt and equity to finance it, those low interest rates really can drive an important part of your final cost.

Stone: Are we talking the late 20-teens, when this is all starting to happen?

Wilson: Precisely. We’re talking about 2018, 2019, 2020. The first solicitations that states like New Jersey and Massachusetts and New York were putting out. They put out solicitations and got in projects that looked incredibly economically competitive. And of the power purchase agreements, or OREC agreements that were signed, of those 22 that were were signed, by 2024, 15 of those had failed.

Stone: Wow.

Wilson: And they had failed because during those interim years, we had had all of the things that you talked about with Covid, with the supply chain issues. The Ukraine war had a double whammy, where not only did it create more problems with supply chains and driving up fuel costs, but it also made Europe much more concerned about its own energy security. So while Europe before had goals for offshore wind, they went up about 20, 30% during that same time period, and that made the supply chains even tighter. And so you’re thinking about this as a— we call them sociotechnical systems. But think back to my rules, tools, and jewels, and where those pinch points are.

And so one of the pieces that we really have appreciated is during that crisis period, is what our state regulators did, and how they tried to adapt and work with the developers to create new mechanisms for addressing these new pressures on the system. And so they tried to do that through the adoption of inflation adders, or ways of incorporating supply chain risk.

One other piece that I think is helpful for us to just understand as we’re talking about offshore wind. These projects take roughly a decade, from when we first secure our offshore release from the federal government— this is through the auctions that BOEM used to hold— to when we negotiate our power purchase agreement through the state solicitations. That’s how we’re doing it now here on the East Coast— with the exception of Virginia, which I think we’re going to talk about later. There’s many years in time lag.

And those years are risky. Those years, in this case, came at a really bad time. There’s no accounting for bad luck. And during that time, we had inflation, and we had supply chain issues, and we had interest rates go up. Our base materials went up. And the cost of offshore wind doubled during that time period. There have been nice reports by the National Renewable Energy Laboratory and others, and we see in the bids of the projects how much more it cost for them to actually be profitable.

Stone: Well, this was phenomenally bad timing, in a sense, if I understand exactly what was happening. And there’s really a timing issue here that you’ve pointed out quite frequently in your research, that, for example, when these project developers were signing the contracts to sell their electricity early on, and then later on, going to the process of actually procuring the equipment and materials to build those projects, those materials costs— those input costs— had gone up dramatically. So those contracts, the PPAs or whatever, selling the electricity, were assuming a cost environment that was much lower than what they faced when they actually started to approach construction. And then the projects were no longer economic. Is that right?

Wilson: My steel costs went up, my copper costs went up, my labor costs went up, my finance costs went up, my foreign exchange volatility also shifted in ways that were oftentimes not helpful. And so yes. The answer is yes, yes, and yes.

Stone: Institutional learning is really one of the focuses of the work that you do. And you’re working on a paper right now that’s very relevant to what we’re talking about. It’s titled “Institutional Learning in the Energy Transition.” I think it’s kind of in the review stage at this point. And in that paper, you point out that states have really worked on adapting to the challenges that we’ve already been discussing. And you bring up a couple of very interesting examples of this, and you talk about their efforts at what you call revenue stabilization, as well as coordinated transmission planning. Tell me what the challenges were there with this. And I think you started to talk about revenue stabilization a little bit. And what are, I guess, the solutions that they’ve come up with?

Wilson: Thank you for that question. And I just want to say that I’m doing this with my colleagues, Tyler Hansen, who’s just starting this week as a new assistant professor at the Technical University of Denmark and the Danish National Wind Laboratory, and my colleague, Stephanie Lenhart, professor at Boise State. We’ve also been working with some undergrads, Aidan Mueller, and Ben Hinchcliffe, who’ve been fantastic to work with on this.

So the revenue stabilization question is a really interesting one. In order to finance a multibillion-dollar project, you need to be able to show that you have a stable revenue source for the future and that your project is financeable. And so the states have worked to develop these mechanisms, these different solicitation processes. You have ORECs, the ocean renewable energy credits in New Jersey and New York, and then you have PPAs, power purchase agreements, in Massachusetts. But essentially they’re the same. What they tell you is that for a long time period, 20 years, you will have a stable revenue source from this asset. For every kilowatt hour you produce, they will be buying it at this certain cost, and then that allows you to secure the finance you need for your project.

So when the first solicitations were written, in 2017-2019 for Massachusetts, 2018-2020 for New York, they did not include a mechanism to address inflation adjustment. I will note that this mechanism had been used in renewable projects in the past, but these first offshore wind projects— in part because offshore wind in Europe had been developed in such a low interest rate environment— the developers weren’t pushing for it in the initial solicitations. But then, when we had those shocks that you mentioned— covid, inflation, interest rates, supply chain issues— these really exacerbated the financial challenges.

And the original PPAs that the developers had negotiated with the states to put their projects together were around $74-$76 per megawatt hour. And those costs would no longer cover the cost of development. The cost of copper going up 50 percent. The cost of steel also going up.

And so what the developers and the states did in subsequent solicitations— we saw them around the fourth solicitation, in New York and the third solicitation in Massachusetts, where they started adding in inflation adjustment mechanisms. Where they started to put in adders that would allow the developer to, after a certain date, true-up their project to these inflationary mechanisms. They considered the price of steel, the price of copper, they included the cost of labor and how much that had increased, and other inflationary mechanisms as well as interest rate risks during that time period. And that gave the developer a little bit of window with which to hedge their risk and hopefully make their projects more financially viable going into the future.

What I think is so interesting about that is that the developers really were learning from their other experiences around the world, in the communications and comments from the developers. One letter in particular was writing that, you know, “You should look at the French model and how they did it. You should look at how New York is addressing it here.” And there was this learning across states, through the developers that were developing projects globally.

Now I think the transmission problem is one that’s different, but also similar. One of the pieces that was so surprising for many of the developers coming from Europe, was how contentious those points of injection are— the landing points for my substation on the coastline for our wind projects.

Stone: Where all those cables come in from the projects onto the land, right?

Wilson: Exactly. We call them points of injection. And that power into the land-based grid is critical for the project. But many of these landings, especially for the projects in New Jersey and New York— Massachusetts as well— became incredibly contentious. And even in Europe, a place where most of that contention around offshore wind happens, tends to be with those points of injection. Those landing points into the onshore grid.

And so states began a conversation. They realized that there was no way they were going to be able to meet their goals unless they had some sort of coordinated transmission planning also accompanying their offshore wind development. And really, New Jersey here has been a huge leader. Because they looked at their coastline, they looked at their grid, and they appreciated that if they wanted to connect those 11 gigawatts that were their goal, they would need to have not 11 sites— a radial interconnection, each project interconnected— but to have fewer group sites. This was better for the grid management. It saved cost. But your big question is, who pays for that and how?

And so the efforts to develop and begin to plan coordinated transmission really started in important ways in New Jersey. And those ongoing conversations about how this sector can best connect to the grid are important today, and really were first identified back in 2005, with the Dutch project saying, “You know what? We want to do all of this, but we actually should be coordinating.” But it’s proven to be super difficult. And it’s super difficult for many, many reasons. And this goes to this mismatch between who pays and who benefits, and the timing challenges that we talked about before, even greater for the transmission planning piece as well.

Stone: Well, you’ve talked also in your research, about— again, we started to talk about some of the early missteps from the States. And when you’re talking about transmission, it makes sense for states to coordinate on that transmission, that they all have the same goals for offshore wind, because the grid is not just confined to one state. One state may be soliciting wind, but its grid interacts with all the neighboring states. So it makes sense to coordinate the development of the grid to handle all that influx of energy. Because the bigger picture you take, the higher view you take of the grid, the more broadly you design it and plan it, the more efficiently you can handle the new energy coming into it. And I think you talked about New Jersey starting that process with the state agreement approach in PJM, where it said, “PJM, go ahead and design the grid for us most efficiently.” But it all those costs would come to the people in New Jersey.

Wilson: Let me put one more point on this one. The National Renewable Energy Lab did a really wonderful Atlantic interconnection study, where they examine the value of having an East Coast offshore grid. And when they did that study, they found out that the benefits were not only connecting the offshore wind projects, but also huge benefits in system reliability. If PJM was better connected to ISO New York. If New England was better connected to the others. And so this idea of our energy system resilience being enhanced by this offshore infrastructure is really where a lot of the value of these investments came from. But the question of who captures those benefits and who makes the investment was, again, very, very tricky to parse.

Stone: Has that been solved?

Wilson: It is an ongoing conversation, and a conference call that I will be on as soon as I hang up with you.

Stone: So one of the takeaways here is, macro-planning and coordination amongst the states looks to be desirable from a cost perspective, from a lot of perspectives. I just want to go back to one other issue that you brought up, some of the early missteps that the states had made. And this goes back to something you also alluded to very quickly earlier, that the states were trying to build their own supply chains, competing for jobs with neighboring states. But that might not have made a whole lot of sense or been sustainable. And that could have also contributed to some of the challenges that the industry has faced.

Wilson: Well, Andy, I’m appreciating that. I am an educator. And when you say misstep, I hear learning.

Stone: Okay, great.

Wilson: So, we learned a lot from those early initiatives there. And as we talked about earlier, the states really wanted to be able to capture those economic job benefits. And so everybody was saying, “Great, we’ll invest in this technology, and we’ll go forward this way. I want a blade factory. I want an ASEL [?]  factory. I want to be able to build monopiles.” And it’s true. With the level of the sector and the slow growth, we didn’t need ten blade factories, nor did we need ten ASEL factories to go forward.

And so what you appreciate is, those first efforts and the first kind of development pieces, were challenging conversations among the states and among the developers in terms of what investments are happening where. And so I do appreciate that there is a need for better coordination. And I also recognize that such coordination is really hard. There was one joint solicitation between Massachusetts and Rhode Island, where, you know, if you don’t— and Connecticut— where it was a multi state solicitation RFP. But it’s really hard to do it if different state interests don’t align.

Stone: So Elizabeth, one of the other challenges that you’ve pointed out is the fragmented regulatory ecosystem in which this offshore wind industry exists in the United States. And as you’ve mentioned already, the Bureau of Offshore Energy Management, which is within the Department of the Interior, it controls leasing in federal waters. And then the states control the off -take agreements and the incentives to the projects themselves. So you’ve got kind of a federal and a state jurisdictional level here. How does this multilevel jurisdictional framework potentially create headaches for the industry, and maybe make it more vulnerable to policy shifts that we’ve seen recently?

Wilson: Andy, this is a super question, and it’s one that— you know, my colleagues told me before that I was being too negative. And so I reframed my engagement with this question of saying, “If you want to make a lot of friends, get into offshore wind, because you’ll meet somebody in almost every agency.” And we joke about that. But one of the things I think that was naive for those of us who’d worked on onshore renewables for years was this idea that once you’re working in the ocean, you don’t have people living nearby, so the conflicts will go away.

And one of the things I think people quickly realized with BOEM, the Bureau of Ocean Energy Management as the lead agency, is that there are a lot of other agencies with real interests in the offshore space that are non-negligible. And I think that BOEM has really done a great job of trying to get the Federal Energy Regulatory Commission, the Department of Energy, the US, EPA, NOAA, with fisheries, the Army Corps of Engineers, the Coast Guard, and the other interests aligned to be able to address the very, very different needs of these different agencies.

I mean, I hadn’t appreciated until with my students, we were reading one of the environmental impact statements that BOEM leads—and if you ever need a good cure for your insomnia, may I recommend the 2000 pages of the of the Revolution Wind EIS— but they couldn’t put a transmission point of injection in one port, because there’s apparently a torpedo zone off the course of Rhode Island, which I had no idea about. But you appreciate that they need to really link up all of these different needs to be able to build these projects forward.

But let’s back up just a minute. Before an offshore wind can be built, they need to have space in the outer continental shelf. And when we were first trying to develop offshore wind back with Cape Wind, there was no process for how that could work at all. And that was one of the real challenges for that project. Any any distance off the shore is the federal land.

And so the feds, led by BOEM, are now putting out lease areas which the developers bid on. You can see a nice map of all of the different lease areas that were leased under the administrations. And this was allowed under the 2005 Energy Policy Act. And so the 2005 Energy Policy Act established a procedure for how to grant these lease areas out in federal waters, off of our east coast. Bidders bid on them. They secure these lease areas. And once they have the lease area, they can then negotiate the PPA, the power purchase agreement, with the different states to meet the state energy goals. So already, before you start the permitting, you have quite a few actors involved in this process.

And then at the state level, you have the interests of the governor, you have the interests of the legislator, you have the interest of the energy offices, the public utility commissions, the Environmental Protection offices, the coastal management, the port authorities. And then, of course, our citizens. Our fisher communities, our coastal communities and others who are also involved in the processes of how energy policy gets made in our states.

And what we often neglect, but equally important, are our regional transmission organizations. ISO New England, New York ISO, PJM that you know so well, are also part of this ecosystem of how the power will come into the markets, how the projects will be sited, how the transmission upgrades will be paid for all along the way. So it really is, as most megaprojects are, a very complicated development ecosystem.

This isn’t the same in every part of the world. Other parts of the world have what they call a one- stop permitting shop, where you walk in and everything kind of happens behind a curtain. But here, there are lots of stops along the way. And at any one of those veto points, you can run into a challenge. And I think what surprised a lot of the developers who had most of their experience in Europe, when they came to North America— I think what surprised them was how challenging it was, how time consuming it was, and how one seemingly small decision could really hold up a project for months, if not years.

Stone: Regarding the Bureau of Ocean Energy Management—and thank you for correcting me. I think I said “Offshore Energy Management” before. I’ve got offshore on the brain right now, okay? I think that’s that’s a good place to transition to the next issue here. First off, I don’t know if that office is even engaging or planning any more lease sales at this point for offshore wind. What’s the latest on that?

Wilson: So the first day that President Trump came into office, he signed that flurry of executive orders. And one of these executive orders— I have the title of it. “The temporary withdrawal of all areas of the outer continental shelf from offshore wind leasing, and review of the federal government’s leasing and permitting practice for wind projects.”

Stone: Is that still in effect?

Wilson: Yes, yes. So no new lease areas. That’s what it says first, no new lease areas. Now, the next part of it, “The review of offshore wind permitting practices for wind projects.” The question there, when Trump came into office on January 20 was, would existing projects be allowed to continue? Would fully permitted projects be allowed to continue? And that is something that people weren’t sure about.

And over the past months, The New Bedford Light, the New Bedford newspaper, tracked 18 different actions that have affected the sector since Trump took office. You have 50 percent tariffs on wind turbine imports. You have mandated reviews, including Justice Department reviews. Many of those steps in the development process that we talked about before. That’s led to layoffs, project delays, protests. You have the Department of Energy pulling back billions of dollars for research, for demonstration projects, for transmission investments. You have the Department of Transportation rescinding $679 million for port and offshore wind-related construction efforts. And then you’ve also had a section 232, national security probe into wind imports. And so you really have had multiple points in the system, places where we’re kind of putting a wrench into the gears of how this could work.

I also need to point out that you mentioned before, with Biden and the IRA, the supportive economic development environment for offshore wind, with the tax credits. So under the OBBB, the new Treasury guidance curtails these IRA tax credits. And they’ve shortened the window for the tax credits, and they redefined what it means to start construction and access the permits. So now you have federal tax credits for wind and solar developments that would have expired in 2032, now ending in July 2026.

Stone: Okay. So looking at projects on the ground— or in the water, let’s say, to be a little bit more accurate— there was Empire Wind One in New York, that was stopped by a stop-work order from the administration. That has been resolved through a deal with New York’s governor. And then there was the Revolution Wind project that was subject to a stop-work order in August. And then the DC Circuit Court of Appeals issued a preliminary injunction against that stop-work order just in September, stating that the order would cause irreparable harm to that project. So those two big megaprojects are going forward, as we’re talking today.

Wilson: So March 14, you had EPA withdraw the clean air permit from Atlantic Shores project. But let’s be honest, Shell had already walked away from that project, the developer. It was probably, as we like to say, sub-economic. Not viable anyway. And so that one didn’t seem that big of a hit. But that April 16 stop-work order on Empire Wind, that one really shook through the sector.

And you mentioned the effort by New York State. I also want to call out the developers effort, and the Norwegian government’s effort. There were over 500 meetings that happened between the developer, between New York State, and between the administration, to get that project restarted. When we think about the human effort and hours to get this project restarted, I just think we need to put a little pin in that as well. In Norway, they called it Operation Gandalf, and they estimated losses of around $200 million from that stop-work order. These are not free. On May 1, also, you had a outer continental shelf—a Biden era opinion that allowed for the development of offshore wind— that’s been kind of rewritten in different ways, and we’ll see longer term if that actually plays out.

And you mentioned the August 22 stop-work order for Revolutionary Wind. Now that stop-work order, this was a quote, “addresses concerns that have arisen during the review of the department as undertaking pursuant to the President’s memorandum of January 20, 2025.” So this is a project owned by Orsted, a Danish company. And again, getting that project restarted has been one that is incredibly time consuming and incredibly costly, not only for the developer, but for the people whose jobs and livelihoods are are impacted.

I just want to point out as well that our energy systems are depending on this power. Have planned for this power for a decade. And so if these projects are delayed, it’s the rate payers eventually that will suffer from these delays and have to cover these costs.

Stone: So the last few moments of this conversation have been very interesting, because we’ve been going kind of willy nilly through all the projects that have been canceled or impacted. And I think that really reflects— I hate to use this word, but somewhat the chaos that the industry finds itself at at this point in the country, driven by the federal policy actions. So I think the key question is, at this point, in everyone’s mind, is the extent to which this has impacted investor confidence. I would think that that’s quite significant. And I want to ask this question. Even if federal policy were restored, if it were again fully favorable to offshore wind, would that alone be enough to bring developers and financiers back? What’s your view on that? Because I think everybody’s wondering, where is this industry going to go?

Wilson: Andy, I think this is a fabulous question. And you mentioned chaos. We talk about whiplash. I just want to back up for a second. This is a global industry. This is a global sector with local deployments. It is true that in its current climate, the US East Coast is not a favorable environment for development. We don’t have the policy stability to support decade-long projects, and that volatility is not helpful for attracting investment.

That said, the experience of the sector globally, when we are ready to develop our offshore wind sector— and like I said, we have some of the best conditions in the world to deploy this technology in terms of our long, shallow continental shelf, high energy demand, and really the ability to have large scale clean power offshore—the wind will still be blowing. The energy need will still be there.

Stone: The opportunity still exists.

Wilson: The opportunity still exists. Whether we’re able to create that policy environment, my rules, tools and jewels to support this innovation, remains to be seen. But one of the take homes for me is that the innovation within our institutions, within our state-level institutions, and being able to support big, complicated projects, it was developing. And it was developing in a very quick, rapid, and important way. And whether or not that can be regained, I think is one of the big questions going forward, too. We like to talk about investment, but investment happens in a climate with stable regulations and policies and ability to recapture your investment. And if we’re living in a world where the rules are changing regularly, it’s impossible to actually get the tools on the ground and deliver the jewels that our society needs.

Stone: Well, let’s talk about a place that you’ve also already briefly mentioned, where things look a little bit more stable. And that’s in the state of Virginia. Virginia is an interesting example, an opportunity for offshore wind, because Virginia itself is struggling with rapid data center build- out. It is kind of the global epicenter for new data centers. It has a lot of new electricity load that it needs to serve, and I believe that offshore wind is part of the state strategy to meet that load.

Virginia is interesting as well— and I want to get your view on this. You’ve written about it. But it’s interesting because it is the one state that we’ve been talking about today that is not deregulated or restructured. It still has the old school, vertically integrated monopoly utilities that control everything from the power plant to the power lines. And they own the end-use relationship with the customers. And Dominion Energy is a utility that operates within Virginia, and it’s working on its own offshore wind farm. And that’s going pretty well. Tell us what’s going on, and how that monopoly utility model might still be behind that.

Wilson: Yeah, 2.6 gigawatts on schedule. I will say they’re also being affected by the tariffs and the increased costs from this regime that will eventually be borne by the ratepayers of Virginia. It’s such an interesting piece. When we were restructuring our utilities in the late ‘90s, early 2000s, it was a promise of lower cost energy. But one of the pieces that I have really appreciated in talking to colleagues from Dominion when we taught our offshore wind class, was how the Dominion ethos is, “We are a utility. We build big infrastructure projects, and we have good relationships with the state to make sure that they can happen.”

And so being able to rate base, CVOW, the Central Virginia Offshore Wind project, has been relatively uncontroversial. You know, Dominion is also a utility that used to be very, very committed to coal. Now they’re a leader in offshore wind, and they’re also talking about building new nuclear projects. So this idea that they have, of, “We need energy. We’re getting energy. This is a technology that makes sense for us,” has been relatively uncontroversial. And I think that’s very interesting.

I also want to point out that they put in, in 2018, two test turbines built by Orsted. And they became incredibly popular tourist destinations for people to sail offshore and visit those turbines. And so they haven’t had nearly the same level of political contention about offshore wind that you’ve seen in some of the New England states.

Stone: So let me jump coasts here. First off, I want to ask you, are we advocating, then, for a restructuring of the electricity industry so that, restructuring back to the monopoly vertically integrated model, so that we can make all this stuff happen? You know, just throwing it out there.

Wilson: Building big infrastructure is hard. Building big infrastructure in an era of political uncertainty, economic instability and governance challenges is impossible. If you want to build big infrastructure, you need structures that will support it. Whether or not we’ll be able to do that with our current model of solicitations and RFPs like we have on the northern New England coast, remains to be seen.

But I do appreciate that, you know— people always say societies get the government they deserve. Well, we have the energy system that we’ve created. And anywhere you go in this country, it works slightly differently. There’s different asset bases, there’s different resources. The value of these technologies is relative to everything else that’s on the system. And so I appreciate that the evolution of the rules, the tools and the jewels will take a slightly different shape elsewhere. But I think it’s important to appreciate the important role that institutions play in allowing these different technologies to be deployed or to languish.

Stone: Well, in the regulated model, the traditional model, you have one entity that’s controlling pretty much the whole process. Whereas in the merchant model, where you have these companies that are coming on as developers and having to work with the states, you’ve got a lot more entities that you have to deal with. I think that’s a fair takeaway from what we’re seeing here.

Wilson: And entities that want to make sure they earn enough profit to make it worth their while. I mean, at the end of the day, the rate payer will always pay. That is universal across all of our systems. But how we organize who wins, who takes the profits and where those profits are invested, that’s something that our state agencies are trying to negotiate. And it’s a hard job, because the controversy of the technology also has to do with how our energy systems work in times of crisis.

Look, none of our energy systems are built for the world we’re moving into. You don’t have to believe in climate change because climate change believes in you. We haven’t designed our electricity system, our road system, our sewer systems for the weather- driven, climate-driven world we’re moving into. And so that adaptation of a new energy system is one that’s going to take all of us to work together. And offshore wind provided a promise of large-scale carbon-free power that could really allow the East Coast to have those resources, meet their climate goals, and keep moving forward, hopefully, while also supporting their economies. But it does take a level of stability and investment to create a new sector that’s populated by megaprojects.

Stone: Elizabeth, thank you very much for talking.

Wilson: Thank you very much, Andy. I appreciate it, and I hope you have a good day. Get those chia seeds out of your teeth.

Stone: Thank you. Today’s guest has been Elizabeth Wilson, Professor of Environmental Studies at Dartmouth College, and that was related to our question as we were doing a sound check for this episode on what we’d had for breakfast. I’ll leave it at that.