Offshore wind energy is facing increasing costs and economic uncertainty, exacerbated by President Trump’s recent executive order halting offshore wind leasing. The average cost of offshore wind projects has surged 30-40% in the past two years, reaching $230 per megawatt hour, largely due to high interest rates and supply chain disruptions.
Project Cancellations and Industry Struggles
- Major companies are pulling out: Norway’s Equinor, Shell, and Danish developer Ørsted have canceled offshore wind projects across multiple countries due to unsustainable costs.
- Shell suffered a $996 million loss from the Atlantic Shores wind farm in New Jersey and pulled out of other international projects.
- Ørsted wrote off $4 billion after canceling two large New Jersey wind farms, citing rising costs and supply chain issues.
- Despite setbacks, Dominion Energy’s 2.6 GW Coastal Virginia Offshore Wind project is still underway, with costs rising by $900 million to $10.7 billion.
China’s Dominance in Wind Energy Manufacturing
- China now controls 43.2% of global wind energy capacity, making Europe and the U.S. heavily reliant on Chinese-made wind turbine components.
- Rare earth magnets, critical for wind turbines, are predominantly produced in China, raising concerns over energy security and supply chain vulnerabilities.
- The UK and U.S. fear geopolitical risks, as China has previously restricted exports of critical minerals in disputes with Japan and the U.S.
U.S. Dependence on China’s Critical Minerals
- The Biden administration has blocked key mining projects in the U.S., limiting domestic production of essential minerals for wind and solar projects.
- Revoked federal leases for Twin Metals mine (Minnesota) and denied Alaska’s request to build a 211-mile road to key mineral-rich areas, further increasing reliance on China.
Conclusion
Offshore wind remains one of the most expensive renewable energy sources, facing rising costs, supply chain issues, and project cancellations. President Trump and critics argue it is intermittent, costly, and requires expensive backup power. Meanwhile, China’s dominance in wind energy manufacturing and critical minerals raises national security concerns for Western nations shifting away from fossil fuels.
