Trump Administration Gets Strategic With Offshore Wind

From THE MANHATTAN CONTRARIAN

Francis Menton

Among all the crazy ways that humanity is supposed to “save the planet” by reducing emissions of carbon dioxide, offshore wind electricity generation has to be about the craziest. Between the expense of building and integrating the facilities and the intermittency of the output, the build-out of offshore wind infrastructure has threatened large and accelerating increases in consumer electricity bills.

Despite lack of any demonstration of feasibility or cost of running the grid on offshore wind, the Biden administration (with support from Congress) threw tens and hundreds of billions of taxpayer funds into the industry in the form of open-ended life-of-project tax credits.

The Trump administration came into office with a known hostility to offshore wind. However, its first efforts to shut down construction on these projects ran into a wall of judicial opposition. But rather than giving up, or embarking on years of appeals with uncertain outcomes, the administration has done some strategic thinking and come up with Plan B. This one looks to me like it will work.

But first there was Plan A. On December 22, 2025 the Interior Department announced that it was ordering a pause on all offshore wind projects under construction in the U.S. The stated ground was national security:

The Department of the Interior announced today that it is pausing—effective immediately—the leases for all large-scale offshore wind projects under construction in the United States due to national security risks identified by the Department of War in recently completed classified reports.

That Interior Department’s Order was immediately met with a barrage of litigation that, within a matter of a few weeks, had produced some five preliminary injunctions in favor of five separate projects. A February 2, 2026 article in the New York Times reported on the fifth of the injunctions:

A federal judge on Monday struck down the Interior Department’s order to halt work on a multibillion-dollar wind farm off the coast of New York State. . . . It was the fifth time in the past three weeks that a federal judge had rebuked the Trump administration’s crusade against the five wind farms under construction in federal waters along the East Coast. The previous four rulings allowed work to continue on Revolution Wind off Rhode Island, Empire Wind off New York, Coastal Virginia Offshore Wind off Virginia and Vineyard Wind off Massachusetts.

So it was all triumphalism at the Times back in February. But now that triumphalism has returned to the usual outrage as the administration has devised Plan B and started to implement it. The Times article from April 27 has the headline “Trump Administration Will Pay More Energy Firms to Cancel Wind Farms.”

Plan B appears to be that the administration is entering into legal settlements with the wind farm developers, whereby the government pays the developers substantial sums of money to walk away from the projects. Oh, and as a kicker, the settlements require the developers to reinvest the settlement funds in oil and gas projects in the U.S. The first such settlement was entered into with the French developer TotalEnergies in March, and then in late April the administration concluded two more such settlements with other developers. From the Times report on the April settlements:

The Trump administration will pay energy companies hundreds of millions of dollars to abandon their plans to build two wind farms off the U.S. coast, the Interior Department said Monday, in a repeat of a tactic the government used to cancel other offshore wind leases last month. The firms will forfeit their leases in federal waters for the two wind farms, one of which would have been built off New York and New Jersey and the other off California. The government will reimburse the companies a combined $885 million, the amount they paid for the leases under the Biden administration. In exchange, the companies have pledged to invest that money in oil and gas projects, including liquefied natural gas facilities along the Gulf Coast.

The usual outrage is palpable:

The agreements are extraordinary transfers of taxpayer dollars to private companies for the purposes of throttling offshore wind power, a source of clean energy that Mr. Trump has disparaged for decades. The president has claimed falsely that offshore wind turbines do not work and that they are killing whales.

Well, that’s their take. To me, these look like pretty good deals. According to the Times itself, the $885 million is just a refund of the amount that the companies had paid the government to acquire the leases in the first place. How much were these projects going to cost the taxpayers in tax credits over their lifetimes? There would have been an investment tax credit of 30% on the amount invested. At a reported investment amount of about $3 billion for Bluepoint Wind and as much as $20 billion for Golden State Wind, investment tax credits could have been as much as about $7 billion. Production tax credits at 2.6 cents per kWh could have been additional billions. And this for intermittent power that could not have replaced any of the existing dispatchable capacity.

The full terms of the settlements with the developers of Bluepoint Wind and Golden State Wind have not been disclosed. However, if these deals are structured as settlements of claims, they are likely to be much more insulated from judicial interference than mere administrative orders as had occurred under Plan A. Also, this structure makes it much more difficult for a subsequent administration to reverse course and get these projects back on track.