The 2024 Presidential Elections and Offshore Wind Energy Development
A rare occurrence in American politics – a presidential rematch – will repeat itself this year when President Joe Biden and former-President Donald Trump face each other in the 2024 presidential election. The election of either would have drastically different impacts on the U.S. energy sector, but few industries would face a more starkly diverging outlook than the offshore wind industry.
Trump and Biden have overseen very different energy regimes during their respective presidencies, encouraging development of various sectors to mixed success. Trump’s focus on permitting reform and easing of regulations on future energy development would speed up construction time for existing projects, both in the offshore wind space and in legacy energy projects such as oil, gas, and coal.[1] However, his previous opposition to opening additional wind energy areas (WEA) for lease could create a new obstacle for the industry.[2] Biden’s eagerness to foster growth of the offshore wind industry has proven beneficial for investment in the U.S., but at the same time, his administration’s glacial permitting pace has created headaches for developers, as have the additional project costs caused by inflation.[3,4]
Outside of Washington, offshore wind developers have been offered incentive packages from states to encourage investment and job creation.[5] Simultaneously, local governments, fishermen organizations, realtors, and a number of other interest groups have fought hard against offshore wind development in their proverbial backyards. Given the varying reception of the industry in certain regions, it has been difficult to establish a uniform strategy to achieve success. This creates a greater need for the federal government to facilitate certainty for the future of offshore wind in the U.S.
After what was a tumultuous year for the industry, offshore wind developers are hoping for a brighter future in the U.S. The number of hurdles ahead, regardless of who wins in November, may only serve to complicate things further. With rising costs due to supply chain issues, increased costs of raw materials, and general inflation, the industry would benefit greatly from additional government aid in the form of tax breaks or grants. Additionally, workforce challenges have plagued offshore wind developers and will continue to slow the pace of installation until more workers can be trained here in the U.S. In the same vein, the Jones Act presents its own challenges for the development of existing leases due to the specifications of the vessels needed to install the turbines Currently, vessels that match these specifications have not been built in the U.S. Timelines for the construction of these vessels in U.S. shipyards will be key to watch as the industry matures. Similarly, state and local governments are asking “what’s in it for me?” and requesting the onshoring of supply chains as a requirement for doing business in their state. This results in vast upfront investment from developers and suppliers to set up shop before there is a long-term pipeline of projects established.[6]
Through targeted outreach and tailored messaging, offshore wind developers should engage with both candidates before the November elections to position the industry for continued progress after 2024.
Regardless of the November elections’ outcome, there will be opportunities for the industry to continue to progress after the 2024 election. Permitting reform remains a top concern for multiple sectors of the economy. Republicans and Democrats have expressed interest in making meaningful changes to permitting, albeit to different extents. The likelihood of a pro-development package hinges on both the Presidential and Congressional elections. Additionally, tax credit extensions or revisions and renewable energy friendly policies remain possibilities, which would be a boon to existing and future projects in the U.S.
Biden Presidency
During the Biden Administration, there has been an unprecedented interest in and growth of offshore wind in the U.S. The Biden Administration’s ambitious goals for 30 gigawatts of offshore wind energy by 2030 has spurred pro-wind policies through Congress in the Infrastructure Investment and Jobs Act (IIJA) and the Inflation Reduction Act (IRA). The implementation of these bills has not been without hiccups, slow rollouts of new programs, some tax credits not meeting developers’ expectations, and some policies in the bills with room for improvement, but the industry has been encouraged by the passage of considerations for offshore wind leasing, transmission planning, and tax credits for developers and manufacturers. Another term for Biden would ensure that these programs are rolled out and can be taken advantage of by the industry. It would also mean the possibility for package of pro-wind “fixes” for the marquis bills to be passed out of Congress, should Democrats control both chambers.
The Biden Administration has been eager to expand WEAs to every coast in the U.S. giving developers ample opportunities for growth. Expansion of WEAs to the Gulf of Mexico are of particular interest as the ports on the Gulf Coast are well equipped to handle large equipment and are home to some of the nation’s largest shipyards, critical to produce new installation vessels. Not only will the expansion of WEAs spur additional investment from the federal government into port infrastructure in the long term, a benefit to all major industries, but it provides the offshore wind industry with much needed certainty that there will be a long-term pipeline of projects. This fact alone makes a second Biden presidency appealing to offshore wind developers.
The workforce for new offshore wind projects will need on the job training from experts that will likely come to the U.S. from Europe, where technicians have been mastering installation in treacherous waters like the North and Baltic Seas. While the Biden Administration has been eager to aid in workforce development for offshore wind, their focus on union labor could create costly headaches for developers and more hoops to jump through than otherwise necessary if this continues throughout a potential second term.
Despite the current administration’s pro-offshore wind stance, the offshore wind industry has faced its fair share of difficulties in the recent past as a result of their environmental policies. Across industries and sectors, permitting delays have wreaked havoc on new projects and developments, nullifying many of the positive impacts of other administration policies.[7] Administration officials strongly support adding additional renewable energy capacity to support our nation’s electric grid; however, this desire is often in tension with extensive environmental and other permitting matters that can slow the quick deployment of these technologies. If Biden retains the presidency, a possible overhaul of the byzantine permitting process may be less likely to yield the results that developers are calling for.
Trump Presidency
The potential of a second Trump Presidency would present a very different slate of challenges for the offshore wind industry, with less clear opportunities for industry to capitalize on. The Trump Administration dealt a harsh blow to the offshore wind industry when it was announced in mid-2020 a ten-year ban on offshore leasing in the southeast which included wind production. Even though this was repealed in 2022 and may have been a proclamation made in an effort to gain voters in Florida, it is clear that there is no love lost between the offshore wind industry and Donald Trump.
The Trump Administration was not eager to engage or expand the new offshore wind industry during their term in office. On the campaign trail, Trump has claimed windmills are killing birds, the noise from windmills causes cancer, and that offshore wind developments are driving whales “crazy.” These nonsensical statements have taken hold with his constituency to some degree and have resulted in a strong preference for traditional sources of energy. The initial gut opposition to offshore wind by a potential Trump Administration would serve to be a difficult challenge to overcome at the outset and would require a strong push and targeted messaging from the right.
Trump’s strong affinity for “America first” policies could also serve to further hold back the predominantly European companies seeking to do business in the U.S. Even as efforts are being undertaken to onshore essential supply chains and train a new workforce, an unfriendly president might make the case that further offshore wind development in the U.S. is not worth the headaches. Trump’s hardline positions on American manufacturing and domestic industrial preference coupled with the piecemeal, state by state regulatory system in the U.S. could prove to be the straws that break the back of foreign investment in the U.S. However, if the industry can onshore enough of the supply chain, create a number of new jobs, and present the case that the new domestic energy capacity and manufacturing is a national security concern, there is hope that Trump could encourage the growth of a new American industry. This focus on American dominance could result in new investment in our nation’s shipyards and ports, focus on energy independence, and domestication of supply chains, all of which can be accomplished with offshore wind.
One of the biggest opportunities that might present itself during a Trump presidency would be the possibility for meaningful permitting reform that could solve many of the offshore wind industry’s problems and guarantee an efficiently operating pipeline of projects. Whether this could be accomplished via executive order or through Congress, it would be a boon to most major industries and developers in the U.S. Permitting reform, hand in hand with what will likely be a strong focus on domestic energy and resource development, could create the perfect mix of factors leading to explosive growth of offshore wind.
Conclusion
The 2024 election features two candidates with a defined track record on offshore wind. This provides unique opportunities for engagement with either administration, each having different focus areas and messaging tailored to what appeals to their platform. A second term Biden Administration will be focused on protecting their legacy legislative initiatives and ensuring their successful implementation. Whereas a second term Trump Administration could be focused on tearing these reforms down wholesale unless appropriate pressure is applied to preserve key industries.
Any advocacy effort must be grounded in the messages that most resonate with the respective administrations. For Biden, the current support for clean energy, success of marquis legislation, climate smart initiatives, and more union jobs will be successful in continuing the administration’s support for offshore wind and pushing towards new considerations. Working with a Trump White House could prove to be more difficult but with the right messaging and investments that support job creation, energy and national security, creation of domestic supply chains and manufacturing, as well as workforce development programs, there is hope to flip the script on his support for the offshore wind industry.
The future of offshore wind in the U.S. is at a tipping point. No matter who wins the 2024 election, the coming years will make or break the offshore wind industry. It will be of the utmost importance for developers to have a strong network of support and significant reach into either administration with a coordinated and well-tailored message. If done well, offshore wind in the U.S. could see exponential growth and position itself as one of the nation’s energy producing powerhouses.
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[1] Ed Crooks, “What a second Trump term could mean for US oil and gas,” Wood Mackenzie (January 12, 2024), https://www.woodmac.com/news/opinion/what-second-trump-term-could-mean-for-us-oil-and-gas/
[2] Josh Siegel, “’Somewhat terrified’: A key Biden official gets candid on Trump’s agenda,” Politico (February 2, 2024), https://www.politico.com/news/2024/02/08/trump-wind-power-crusade-00140128
[3] Valentijn van Nieuwenhuijzen, , Marco Willner, Sebastiaan Reinders and Aviral Utkarsh, “The Inflation Reduction Act Is Driving Clean-Energy Investment One Year In,” Goldman Sachs (October 31, 2023), https://www.gsam.com/content/gsam/uk/en/institutions/market-insights/gsam-insights/perspectives/2023/us-inflation-reduction-act-is-driving-clean-energy-investment-one-year-in.html
[4] Joseph Webster and Elina Carpen, “US offshore wind’s growing pains: Permitting and cost inflation,” Atlantic Council (June 26, 2023), https://www.atlanticcouncil.org/blogs/energysource/us-offshore-winds-growing-pains-permitting-and-cost-inflation/#:~:text=Two%20major%20issues%20are%20constraining,States’%20deployment%20of%20offshore%20wind
[5] Iulia Gheorghiu, “New York announces 2-GW offshore wind solicitation with a focus on supply chain infrastructure,” Utility Dive (July 28, 2022), https://www.utilitydive.com/news/new-york-2-gw-offshore-wind-solicitation-supply-chain-port-infrastructure/628323/
[6] Tyler A. Hansen, et al., “Five grand challenges of offshore wind financing in the United States,” Energy Research & Social Science (November 17, 2023), https://www.nrel.gov/docs/fy24osti/87712.pdf
[7] David Blackmon, “Is U.S. Offshore Wind ‘Fundamentally Broken?’,” Forbes (November 3, 2023), https://www.forbes.com/sites/davidblackmon/2023/11/05/is-us-offshore-wind-fundamentally-broken/?sh=69ae9c137b1d
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