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Clean energy developers and the bankers who fund them are all pretty confident that a change in power in Washington, should one occur next year, won’t mean the end of the Inflation Reduction Act or the buildout of renewables across the country — except, that is, when it comes to offshore wind. Trump has special contempt for wind energy in all its forms — to him, all wind turbines are bird murderers, but offshore turbines are especially deadly, adding both whales and property values to their list of victims. He has said he will issue an executive order on day one of his second turn as president to “make sure that that ends.”
While the scope and legal enforceability of any potential executive order remain unclear, the wind industry, environmental activists, and analysts have all found plenty of other reasons to be worried.
“I think it’s safe to say that it’s pretty clear from Trump’s first term in office and everything he’s been saying on the campaign trail that he’s pretty hostile towards offshore wind,” David Rogers, the deputy director of the Sierra Club’s Beyond Coal campaign, told me.
Trump’s first administration exhibited a kind of bipolar attitude toward offshore wind — sometimes issuing press releases bragging about leasing to developers, sometimes dragging out environmental approval for major projects.
In December, 2018, when the Department of the Interior leased some 2 million acres of ocean territory to offshore wind developers for almost $500 million, the office put out a press release bragging about a “BIDDING BONANZA” and quoting then-Secretary Ryan Zinke saying “to anyone who doubted that our ambitious vision for energy dominance would not include renewables, today we put that rumor to rest.”
The next year, the department delayed and expanded its review of what was then the country’s most advanced wind project, Vineyard Wind, a move that many advocates interpreted as tantamount to canceling it. Interior Secretary David Bernhardt, who had taken over the department following Zinke’s ignominious resignation, has since defended the review, claiming that he was trying to put the project on firmer legal footing. Vineyard Wind’s developers eventually pulled their permit application and refiled it under the new Biden administration; the project began generating power off the coast of New England early this year, though not before New York’s South Fork Wind beat it onto the grid.
With the U.S. offshore wind industry now far more mature, advocates worry that similar shenanigans would either delay or effectively deny new wind projects that have yet to come online.
David Stevenson, the director of the Caesar Rodney Institute’s Center for Energy & Environmental Policy, who served on Trump’s Environmental Protection Agency transition team and is a longtime opponent of offshore wind, predicted that should Trump win, he would follow through on his promises. “The first thing there will be a day one executive order,” Stevenson told me. That order would almost certainly stop any new approvals, plus possibly stop new construction. Stevenson also said that a Trump administration could settle lawsuits over approvals given to wind projects by agreeing to halt them.
Other tactics at Trump’s disposal could include ceasing new lease auctions; underfunding and understaffing the Bureau of Ocean Energy Management, the Interior Department agency that handles offshore wind; or simply rejecting permits.
“During the Trump administration’s first term, it banned all offshore exploration off of the southeast Atlantic coast — that included drilling and offshore wind. That put a halt on all offshore wind development,” Rogers said. “It wouldn’t be shocking to see some kind of moratorium put in place.”
Not only might new leasing slow to a halt, but projects that are still waiting for final construction authorization from BOEM for might also find themselves stuck in limbo.
“We consider the primary risk here would relate to new projects, rather than existing ones operational or under construction, for example through a federal ban, delay or moratorium on permitting,” Morgan Stanley analyst Robert Pulleyn wrote in a note to clients. Analysts listed three East Coast wind projects with permitting expected to be completed this year — Sunrise Wind in New York, Atlantic Shores South in New Jersey, and Momentum in Maryland — that may yet survive. But Morgan Stanley also identified some 6,500 megawatts of planned projects that are not yet fully permitted that could be at risk in a more wind-hostile White House.
Slow-walking wind the more roundabout way, by reducing staffing, would be a bit trickier for Trump. But as his past record shows, it would also be far from impossible.
“Agency funding levels — which are an important consideration when it comes to staffing — are the result of a negotiation between the executive and legislative branches. So if there is a Trump Administration, the composition of Congress will also influence staffing,” Paul S. Weiland, a partner at the law firm Nossaman LLP, told me in an email. “That said,” he added, “the administration can, more or less by itself, stop hiring and create conditions where staff attrition increases.”
The industry is fully cognizant of these challenges and is preparing a counterargument that focuses not just on clean energy production, but also on the economic and infrastructure development that comes with offshore wind.
At a conference hosted by the American Council on Renewable Energy, Meghan Schultz, the chief financial officer of Invenergy, which has offshore wind leases in California and New Jersey, said “it will be important that we’re working as an industry to educate this administration on the value these projects will bring.” She also specifically mentioned the buildout of port infrastructure as something that could be appealing to a Trump White House.
In a recent interview on the Odd Lots podcast, meanwhile, the Danish energy company Orsted’s Americas chief executive, David Hardy, mentioned “job creation, the infrastructure and its core things like steel and ports and ships and factories” as “bipartisan” benefits of offshore wind.
There are even some Republicans in Washington who have supported offshore wind in the past, typically hailing from states that are otherwise friendly to energy development. So while Florida Governor Ron DeSantis staunchly opposes offshore wind development (Florida’s coasts are for tourism and real estate, not industrial development), Louisiana Republicans including House Minority Leader Steve Scalise and Senator John Cassidy have been more supportive. Scalise and Cassidy both signed a bipartisan letter in 2019 encouraging Interior to finish its review of Vineyard Wind, and Cassidy cheered offshore wind leasing in the Gulf of Mexico.
“We’re an ‘all of the above’ energy state,” Cassidy said at the ACORE conference. “I think offshore wind ideally has a tremendous role.”
But offshore wind off the coast of Louisiana may have more physical and economic problems than political ones, thanks to the Gulf’s relatively low wind potential and high frequency of extreme weather, while offshore wind developments on the East Coast have been beset by delays, drastic cost increases, and cancelled projects.
There is a degree to which advocates for wind energy, in addition to going about their usual work, will just have to pray for the best: “We hope that developers who have leases in hand and have responsibly-sited projects that they’re working to get approved will fight to develop those projects,” Rogers told me.
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A conversation with Jillian Blanchard of Lawyers for Good Government about the heightened cost of permitting delays
This week I chatted with Jillian Blanchard, vice president of climate change and environmental justice with Lawyers for Good Government, an organization that has been supporting beneficiaries of the Inflation Reduction Act navigate the uncertainties surrounding tax credits and grant programs under the Trump administration. The reason I wanted to chat with Jillian is simple: the IRA is under threat for the first time under a Republican Congress. I wanted to understand how solar and wind projects could be impacted by the House Republican reconciliation bill and putting IRA tax credits in doubt. I learned a lot.
The following conversation was lightly edited for clarity.
Okay, Jillian, what’s the topline here? How would the GOP reconciliation bill impact individual projects’ development?
There are big chunks of the reconciliation bill that will have dramatic impacts on project development, including language that would repeal or phase out bipartisan and popular tax credits in a way that would make it very, very difficult to invest in projects. I can get into the weeds next.
But it’s worth saying first – the group of programs aside from tax credits that [House Republicans] would repeal represents every single part of America. Hundreds of projects that will not go forward if these programs are not going well. And they have several legally obligated grants that EPA has already mucked up in a litany of ways. But what they’re proposing to do is to pull the rug out from under those programs. On top of that they want to pull any unobligated funding out.
I think it’s extremely misrepresentative to say these are not big cuts. They’re significant cuts to clean air and clean water across the board.
Help me get into the weeds about how phasing out the credits will make it harder to invest in a project.
Right now, a bank might want to invest a certain amount of money in a clean energy project because they know on the back end they can get 30% or 40% back on their investment. A return through tax credits. They can bank on that, because tax credits are a guarantee.
Was that an intentional pun? “Bank”?
Yeah, it is. I love a good pun. You opened the floodgates, that was a mistake.
But anyway, the program itself was supposed to be around until at least 2032 and the bank could bank on those tax credits. That’s a big runway, because projects could get delayed and you could lock in the credit as soon as you started construction.
Now they’re doing a phase-out approach where if your project is not placed into service before a certain date, you don’t avoid the phase out. You don’t get any protections if you’re starting your project now or next year. It has to be placed in service before 2028 or else your project may not be eligible. You are constructing it, you are financing it, but then through no fault of your own – a storm or whatever – then suddenly that project is no longer entitled to get 30% or 40% back.
That’s a big risk. And banks don’t like risk.
Opposition on the ground also delays projects the way a storm does. Would this empower those opponents?
Oh, totally. Totally. If anyone wants to fight a project, a bank might be even less likely to invest in it. The NIMBYs for that particular project become a risk.
What would you tell a developer at this moment who is wondering about the uncertainty around the IRA?
I would tell them that now is the time to speak up. If they want to stay in this business and make sure their energy stays as low-cost as it already is, they need to speak up right now, no matter what their political party affiliation is. Make it clear solar isn’t going away, wind isn’t going away, storage isn’t going away. These are markets America needs to be competitive with the rest of the world.
Investors are only just now starting to digest what the proposed cuts will mean, especially for energy storage.
Is Wall Street too sanguine about the House of Representatives’ proposal to gut the Inflation Reduction Act? When the House Ways and Means Committee unveiled its language on the law on Monday — phasing out tax credits, implementing strict restrictions on business relationships with Chinese companies, and altering when projects are eligible for credits — some investors responded to the cutbacks by driving up the prices of some clean energy stocks.
The residential solar company Sunrun traded up on Tuesday by 8.6%, and the American solar manufacturer First Solar was up over 22%. (Stock movements on Monday were largely in response to the pause of the U.S.-China trade war, also announced that morning.)
“The early drafts of a Republican tax and spending bill weren’t as bad for renewables as feared,” wrote Barron’s. Morgan Stanley analysts used the same language — “not as bad as feared” — in a note to clients on the text. “Industry was bracing for way worse,” Don Schneider, the deputy head of public policy for Piper Sandler and a former Republican staffer on the Ways and Means Committee, wrote on X.
While many analysts — and, to be honest, journalists at Heatmap — have issued dire warnings about how the various provisions of the Ways and Means language could together make much of the IRA essentially impossible to use, even before the tax credits phase out, investors on Wall Street and in Washington seem to have shrugged them off. Some level of cutting was all but inevitable, and “not as bad as it could have been” is reason enough to celebrate — plus there’s also “it’ll probably change, anyway.”
There’s something to this. A group ofmoderate Republicans criticized the language on Wednesday as too restrictive, specifically citing changes to three overarching features of the tax credits: when projects would be eligible for tax credits, where companies are able to source components and materials, and whether companies are allowed to freely buy and sell tax credits generated by their projects. (Wouldn’t you know it, these complaints largely echo what Heatmap has written in the past few days.)
In the Senate, meanwhile, Republican Kevin Cramer of North Dakota, said that the text as written would be too damaging to advanced nuclear and enhanced geothermal generation. The phase-out timelines in the Ways and Means language are “too short for truly new technologies,” Cramer told Politico.
Pavan Venkatakrishnan, an infrastructure fellow at the Institute for Progress, told me that he expects the bill to evolve in a way to meet the concerns of Senate Republicans like Cramer.
“Given considerations both political and procedural, like the more flexible reconciliation instructions Senate Finance is afforded relative to House Ways and Means and the disproportionate impact current text entails for technologies Republicans traditionally favor, like nuclear, geothermal, and hydropower, I think it’s fair to say that this text will change over the coming weeks,” he said.
Finally, days after the Ways and Means committee made its thinking public, Wall Street seems to be catching on to the implications. The new foreign entities of concern rules pose a particularly huge danger to the renewable energy sector, according to Jefferies analyst Julien Dumoulin-Smith, and especially to energy storage, which would be the key provider of reliability on a renewable-heavy grid. Energy storage looks to account for almost 30% of new generator additions this year, according to the Energy Information Administration.
“We think the market got it wrong for storage,” Dumoulin-Smith wrote in a note to clients. The market has yet to “digest and fully interpret the implications of proposed tariff and tax policy, which as currently written do not bode well for storage,” he said. The foreign sourcing language “is more restrictive than initially thought, with some industry stakeholders calling the proposal a near repeal on IRA.”
The storage supply chain is intensely entangled with China. Many companies, including Tesla,have been forced to disclose to investors just how reliant they are on China for their storage businesses.
China alone accounted for 70% of battery imports in 2024, according to industry analysts at BloombergNEF, over $14 billion worth. About a quarter of the metals used in battery manufacturing — especially graphite — came from China, BNEF figures show. For specific battery chemistry like lithium iron phosphate, which is popular for stationary storage products, the supply chain is essentially 100% Chinese.
Wall Street revenue and profit estimates “do not adequately capture the extent of risks” facing the U.S. storage industry, Dumoulin-Smith wrote. The storage company Fluence’s stock fell around 1.5% today, and is down over 5.5% since close of trading on Monday, as the market began to digest the House language.
It is possible that the foreign sourcing rules will be loosened and phase-outs for tax credits and transferability lengthened, Venkatakrishnan told me, but not in a way that would endanger the overall structure of the bill. Cuts to the Inflation Reduction Act are a key source of revenue for the Republican bill-writers to ensure as many of the tax cuts they want can fit within the budgetary scope they’ve given themselves.
“Any adjustments will be made with an eye toward ensuring budgetary offsets are sufficient to enable success of the broader enterprise,” Venkatakrishnan said. In other words, as much as some lawmakers may want to see these tax credits preserved, ultimately, they’ve got to pass a bill to ensure Trump’s tax cuts stick around.
And more of the week’s biggest conflicts around renewable energy projects.
1. St. Lawrence County, New York – It’s hard out here for a 2-megawatt solar project in upstate New York.
2. McKean County, Pennsylvania – Swift Current Energy is now dealing with an insurgent opposition campaign against its Black Cherry wind project.
3. Blair County, Pennsylvania – Good news is elsewhere in Pennsylvania though as this county has given the go-ahead for a new utility-scale Ampliform solar project, the BL Hileman Hollow Solar project.
4. Allen County, Ohio – The mayor of Lima, a small city in this county, is publicly calling on Ohio senators to make sure that the pending reconciliation bill in Congress ensures Inflation Reduction Act tax credits can still apply to municipalities.
5. Vanderburgh County, Indiana – Orion Energy’s Blue Grass Creek solar project is now facing opposition too, with Orion representatives telling local press they actually expected some locals to be against the project.
6. Otsego County, Michigan – That state forest-felling solar farm that Fox News loved to hate? That idea is no more.
7. Adams County, Illinois – The Green Key solar project we’ve been following in the town of Ursa has received its special use permit from the county after vociferous local opposition.
8. Dane County, Wisconsin – We’re getting a taste of local worry about how the GOP’s efforts to change the IRA could affect municipal energy planning, thanks to the village of Waukanee.
9. Olmsted County, Minnesota – The fight over Ranger Power’s Lemon Hill solar project is evolving into a nascent bid to give localities more control over permitting renewables projects.
10. Cherry County, Nebraska – This county is seeking an investigation into whether Sandhills Energy’s BSH Kilgore wind farm is violating zoning standards after receiving requests from residents who are against the project.
11. Albany County, Wyoming – Bird conservation activists fighting wind projects in Wyoming claim the Interior Department is providing them incomplete information under the Freedom of Information Act about wind turbines and eagle deaths.
12. Santa Fe County, New Mexico – Renowned climate activist Bill McKibben is publicly going on the attack against opponents of an individual solar project, the AES Rancho Viejo solar farm near Santa Fe.
13. Apache County, Arizona – Opponents of the Repsol Lava Run wind project are now rallying around trying to stop transmission for the project.
14. Klickitat County, Washington – The Cypress Creek Renewables solar project we told you last week got fast-tracked by the state Energy Facility Site Evaluation Council? Turns out the county had a moratorium on new solar and anticipated a chance to formally file public comments before that would happen.